Last year, not too long after Apple abruptly settled its long-running lawsuit with Qualcomm, the chipmaker was hit with a ruling that its business practices were anti-competitive in a case filed by the Federal Trade Commission. After a period of one year to appeal that decision, Qualcomm today won its bid to reverse that ruling.
As part of the FTC case decision of the U.S. Court of Appeals 9th Circuit last year, Qualcomm was instructed to renegotiate its licensing agreements. However, the company appealed the decision and the ruling was given a year later.
Reported by Bloomberg, the victory of Qualcomm appeal is probably worth billions of dollars.
The ruling Tuesday by a three-judge panel is a blow to the Federal Trade Commission, which last year won a contract requiring the company to make patent licenses worth billions of dollars again with phone makers.
At the time of this writing, Qualcomm’s stock was up almost 5% on the news.
Qualcomm claimed in the appeal that “its licensing company benefits the entire sector by improving smartphones and the services they support.
And noted that “it does not stop rival chipmakers from accessing its technology. Instead, fees are charged to phone makers who pay a percentage of the sales price of each handset. ”
Remarked by Bloomberg, a factor in reversing last year’s ruling was certain the US Department of Justice siding with Qualcomm instead of the FTC.
In a rare split among anti-trust regulators, the U.S. Justice Department filed a lawsuit with Qualcomm against the FTC, claiming that Koh’s ruling could undermine U.S. leadership in technologies including 5G wireless networks.
Last year, when Apple settled its lawsuit with Qualcomm, it signed a license agreement that goes through 2025 for modem chips with an option to extend that to two years. Meanwhile, Apple is working on developing its own modems so that it can not be dependent on Qualcomm in the long run.
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