FTC urges Ninth Circuit to review Qualcomm antitrust ruling
The Federal Trade Commission (FTC) has moved for a rehearing of an antitrust suit it brought against Qualcomm and lost on appeal.
The FTC—on Friday, September 25—filed its request for an en banc rehearing before an 11-judge panel at the US Court of Appeals for the Ninth Circuit.
Last month, the Ninth Circuit sided with San Diego-based Qualcomm, finding that the company’s practices for licensing standard-essential patents don’t violate antitrust laws.
The landmark ruling gives legal backing to Qualcomm’s controversial “no licence, no chips” policy, which the FTC had argued was tantamount to blocking competitors out of the market.
In a complaint filed in January 2017, the FTC had charged Qualcomm with using anti-competitive tactics to maintain monopolies in markets for the supply of modem chips, components that facilitate cellular communications in cellphones and other consumer products.
The FTC was initially successful in its bid, with the US District Court for the Northern District of California holding that Qualcomm had violated the Sherman Act, which governs antitrust law, in May last year.
However, this decision was overturned last month by a three-judge panel at the Ninth Circuit, which concluded that Qualcomm didn't have an antitrust obligation to license its IP to rival chipmakers and that its practice.
Following the Ninth Circuit’s ruling, the FTC was implored to seek an en banc rehearing in a letter signed by a group of companies and trade organisations, including Ford Motor and Honda Motor.
The companies argued that the August decision endangers “domestic competitiveness” and threatens to “weaken the ability of the FTC to protect consumers through future enforcement actions”.
Late last week, the FTC filed its petition, arguing that the ruling was a legal error.
“The panel’s errors have cast doubt on fundamental matters of antitrust principle and will encourage monopolists to cloak anticompetitive practices beneath false invocations of patent law and the appearance of neutrality. Any one of these errors would justify en banc review; in combination, they cry out for the full court’s intervention,” said the FTC.
It claimed that if the August decision stands, it effectively “blesses the continued stifling of competition in multi-billion-dollar markets for cellular-communications chips on which much of the digital economy depends”.
The Commission vote authorising staff to file the petition was 3-2.
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