Ford, Honda implore FTC to seek rehearing in Qualcomm antitrust ruling
The US Federal Trade Commission (FTC) has been urged to seek an en banc rehearing of its unsuccessful antitrust case against Qualcomm in a letter signed by a group of companies and trade organisations, including Ford Motor and Honda Motor.
The letter, issued on Monday 24 August, argued that the US Court of Appeals for the Ninth Circuit’s decision on August 11 endangers “domestic competitiveness” and threatens to “weaken the ability of the FTC to protect consumers through future enforcement actions”.
In 2017, the FTC sued Qualcomm, accusing the company of using anti-competitive tactics to maintain its monopoly for chips used in phones and other consumer products. A federal district court agreed in May, but the Ninth Circuit overturned the landmark ruling.
The decision provided legal backing to Qualcomm’s controversial “no licence, no chips” policy, which the FTC argued was tantamount to blocking competitors out of the market.
Qualcomm licenses its standard-essential portfolios (SEPs) exclusively to end-product manufacturers of smartphones and smart cars, which license telecommunications standards like 4G. In the case of rival chipmakers, Qualcomm refuses to license its SEPs unless the licensees agree not to sell to unlicensed end-product manufacturers.
The letter argued that, “the panel opinion misapplies competition law to the facts of the case, was particularly misguided in asserting that Qualcomm’s breach of its FRAND commitments did not impair rivals, controverts existing Ninth Circuit precedent, and undermines the critical role standards play in facilitating competition and innovation”.
It further stated that if the decision is allowed to stand, it will encourage “the abuse of market power” and could “embolden foreign entities to refuse to license their SEPs to competitors” in the US.
The letter concluded: “Again, for the benefit of standards, innovation, and consumers, we urge the FTC to see this matter through, including by seeking en banc rehearing of the Ninth Circuit panel’s reversal of the district court’s decision and vacating of the district court’s remedies.”
The FTC has until September 25 to request a rehearing by the full Ninth Circuit.
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