Qualcomm Antitrust Lawsuit to Proceed, US Judge Rules

The Federal Trade Commission’s antitrust lawsuit against Qualcomm can proceed, a federal judge ruled late on Monday, meaning the iPhone chip supplier must now wage a fight with US regulators even as it contests a separate $1 billion lawsuit filed by Apple.

US District Judge Lucy Koh of the Northern District of California in San Jose denied Qualcomm’s motion to dismiss the FTC’s lawsuit, saying the agency’s allegations would amount to anticompetitive behaviour on Qualcomm’s part if proved true.

In response, Qualcomm said the case is still in its early stages. “FTC will have the burden to prove its claims, which we continue to believe are without merit,” Don Rosenberg, executive vice president and general counsel of Qualcomm, said in a statement on Tuesday.

The FTC sued Qualcomm in January, alleging the company engaged in anticompetitive tactics to maintain a monopoly on the chips that let cell phones connect to mobile data networks.]

The FTC highlighted Qualcomm’s “no licence, no chips” policy under which the San Diego company refuses to sell chips unless customers also sign a patent licence agreement and pay Qualcomm fees. Qualcomm refused to grant licenses to its rivals in order to keep a monopoly, the FTC alleged.

Qualcomm asked Koh to throw out the case, arguing that even if all the FTC’s allegations were true, they would not amount to wrongdoing.

Qualcomm, the largest independent maker of chips used in smartphones, is a major supplier to Apple and Samsung Electronics for modem chips that connect phones to wireless networks.

Qualcomm Antitrust Lawsuit to Proceed, US Judge Rules
Intel and Samsung, which are not parties to the case, filed briefs opposing Qualcomm’s attempt to the have the case dismissed.

Koh rejected Qualcomm’s arguments, ruling that the FTC had “adequately alleged” anticompetitive behaviour.

“We look forward to further proceedings in which we will be able to develop a more accurate factual record,” Qualcomm’s Rosenberg said in the statement.

Separately, Apple sued Qualcomm for $1 billion in January. Last week, Apple argued Qualcomm’s chip licenses are invalid under a ruling last month from the US Supreme Court. Apple’s contract manufacturers such as Foxconn stopped paying Qualcomm as that case proceeds, which in turn prompted Qualcomm to sue the contract manufacturers.

In addition to the complaint from the FTC, Qualcomm has faced a series of antitrust rulings and investigations from regulators across the globe, including China and South Korea.

The FTC’s case is No. 5:17-cv-00220 in the Northern District of California.

Google Hit by Record EUR 2.42-Billion Fine for Breaching EU Antitrust Rules

The EU hit Google with a record EUR 2.4 billion ($2.72 billion or roughly Rs. 17,541 crores) anti-trust fine Tuesday for favouring its own shopping service, in a fresh assault on a US tech giant that risks the wrath of President Donald Trump.

Hard-charging European Commission competition chief Margrethe Vestager said Google had “abused its market dominance” as the world’s most popular search engine to give illegal advantage to its Google Shopping service.

“What Google has done is illegal under EU antitrust rules. It denied other companies the chance to compete on the merits and to innovate,” Denmark’s Vestager told a news conference.

“And most importantly, it denied European consumers a genuine choice of services and the full benefits of innovation.”

Google now has 90 days to “end this conduct” or face further penalty payments, Vestager said.

The fine broke the previous EU record for a monopoly case against US chipmaker Intel of EUR 1.06 billion in 2009.

Google said that it “respectfully” disagreed with the EU decision, which followed a seven-year investigation, and was considering an appeal.

“We respectfully disagree with the conclusions announced today. We will review the Commission’s decision in detail as we consider an appeal, and we look forward to continuing to make our case,” Kent Walker, the company’s senior vice president and general counsel, said in a statement.

Google insisted that it “shows shopping ads, connecting our users with thousands of advertisers, large and small, in ways that are useful for both.”

‘Market dominance’
The decision comes less than a year after Vestager shocked Washington and the world with an order that iPhone manufacturer Apple repay EUR 13 billion in back taxes in Ireland.

Google Hit by Record EUR 2.42-Billion Fine for Breaching EU Antitrust Rules
Crucially for Google, Brussels has demanded that the US tech giant change the business model for Google Shopping to meet the EU’s concerns.

While an EU record, the amount is below the maximum possible of more than EUR 8 billion or 10 percent of Google’s total revenue of 90 billion dollars last year.

Brussels accuses Google of giving its own online service, Google Shopping, too much priority in search results to the detriment of other price comparison services, such as TripAdvisor and Expedia.

“Google’s market dominance has given the company power to decide the fate of all but the biggest online service providers – in other words nearly every company,” said Fairsearch, a lobby of complainants, in a statement.

The case, launched in 2010, is one of three against Google and of several against blockbuster US companies including Starbucks, Apple, Amazon and McDonalds.

In the other Google cases, the EU is examining Google’s AdSense advertising service and its Android mobile phone software.

The cases have stoked tensions with Washington and could now face the wrath of Trump, the real estate tycoon who won office on his “America First” slogan.

The decision come after a long negotiation period with many twists and turns in which the two sides tried to settle the case amicably.

Vestager’s predecessor, the Spaniard Joaquin Almunia, made three attempts to resolve the dispute but in each case intense pressure by national governments, rivals and privacy advocates scuppered the effort.