US Appeals Court Ultimately Sides with Trump: "Qualcomm Did Not Violate Antitrust Laws"

Overturning the First Trial Verdict

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] Qualcomm, a telecommunications chip manufacturer that lost in the first trial for violating antitrust laws, won the appeal against the U.S. Federal Trade Commission (FTC).

According to the Wall Street Journal (WSJ) on the 11th (local time), the U.S. Ninth Circuit Court of Appeals ruled that Qualcomm's business practice of requiring smartphone manufacturers who purchased its chips used in wireless devices such as smartphones to enter into patent licensing agreements did not violate antitrust laws.

The appellate court stated, "Qualcomm has no obligation to license its patents to competitors," and "Requiring smartphone manufacturers to enter into patent licensing agreements with Qualcomm is not judged to harm market competition."

This overturned the first trial ruling that found Qualcomm's business practices hindered competition and harmed consumer interests.

Additionally, the appellate court invalidated the first trial court's order that changed Qualcomm's intellectual property licensing practices and required it to renegotiate licenses with smartphone companies.

Originally, this appeal attracted attention as a confrontation between the Trump administration's antitrust regulatory authority, led by the U.S. Department of Justice, and the FTC before the trial even began. The U.S. Department of Justice unusually voiced a different opinion from the FTC by defending Qualcomm on the grounds of national security. Because of this, the lawsuit between Qualcomm and the FTC turned into a proxy battle between the Trump administration and the FTC. Qualcomm is one of the few American companies capable of competing against China's Huawei in 5G technology, and if Qualcomm lost the appeal, it could cause significant damage to U.S. national security.

U.S. Attorney General William Barr warned, "Allowing Huawei to dominate the mobile communication infrastructure market could pose a serious risk to national security."

For this reason, the prevailing interpretation is that the appellate court effectively sided with the U.S. administration in this ruling.

The FTC stated, "The appellate court's ruling is disappointing," and "We will review our options and respond accordingly."