Carmakers Urge FTC Intervention After Defeat In Qualcomm Appeal

Big name carmakers and tech firms have urged the Federal Trade Commission (FTC) to appeal against a recent court ruling in a lon-running antitrust battle against Qualcomm.

The dispute centers over the licensing terms that Qualcomm imposes on customers that use its chips. With cars increasing the tech it offers drivers, the issue has become one that affects the car industry as well as other firms.

The issue began in when the FTC in 2017 accused Qualcomm of violating antitrust law for mobile phones and other tech.

Qualcomm antitrust

In May 2019, US District Judge Lucy Koh in San Jose, California, ruled that Qualcomm illegally suppressed competition in the market for smartphone chips and other sectors by threatening to cut off supplies and extracting excessive licensing fees from manufacturers.

But Qualcomm sought a stay of execution, and filed an appeal.

It argued at the time that it strongly disagreed with Koh’s ruling as it raised “serious legal questions” because, among other things, she excluded evidence after a March 2018 cutoff date – including the fact that Apple dropped Qualcomm in favour of rival chip supplier Intel, showing that Qualcomm did not have a stranglehold on the market.

And now in August 2020, Qualcomm scored a victory when a panel of three judges in the Ninth Circuit Court of Appeals reversed the May 2019 decision.

The panel also lifted a permanent, worldwide, injunction against Qualcomm.

FTC appeal

This triggered the open letter to the FTC from car makers, Intel, and even the Computer & Communications Industry Association (CCIA).

“The undersigned stakeholders write to urge the Federal Trade Commission (FTC) to continue to support innovation and competitiveness by seeking an en banc rehearing of the Ninth Circuit panel’s August 11, 2020 decision in FTC v. Qualcomm, which undermines long-standing U.S. law and policy and wrongly applies competition law

“If allowed to stand, the panel’s decision could destabilise the standards ecosystem by encouraging the abuse of market power acquired through collaborative standard-setting,” the letter states.

“Through its faulty application of competition law, its refusal to consider the district court’s extensive factual findings detailing how Qualcomm’s licensing practices reinforced its product monopoly, excluded rivals,and harmed the competitive process,and its refusal to consider the effect that abusive terms have on original equipment manufacturers (OEMs) and end users,the panel has weakened the FTC’s ability to protect American consumers generally through future enforcement actions in a variety of industries,” the letter concludes.

Backers of the letter include Daimler, Ford, Tesla, Honda, HP, Intel, MediaTek, and the Software & Information Industry Association (SIIA), as well as the CCIA.