Qualcomm’s technology licensing practices and modem chip discount agreements with mobile phone suppliers have come under antitrust scrutiny. The U.S. Federal Trade Commission and Apple challenged Qualcomm’s conduct, alleging that Qualcomm abused its market power in modem chips by refusing to license its technology to rivals and that its discount agreements were exclusionary.
Dr. Chipty was one of Qualcomm’s antitrust experts. She assessed Plaintiffs’ asserted markets, claims that Qualcomm had monopoly power, and the competitive effects of the at-issue discount agreements. Her analysis highlighted, among other things, the importance of accounting for technological innovation in the dynamic modem chipset marketplace.
These disputes came to a head in 2019:
- In Apple v. Qualcomm, the parties settled just as trial began in April 2019. As part of their global settlement, Apple agreed to pay Qualcomm an undisclosed amount and signed a multi-year agreement to purchase Qualcomm’s modem chips.
Qualcomm’s and Apple’s joint statement on the settlement can be found here. Details on the settlement can be found here.
- In FTC v. Qualcomm, the District Court ruled against Qualcomm and enjoined it from continuing the challenged conduct. Qualcomm appealed the decision. The Ninth Circuit stayed the injunction, stating “[w]hether the district court’s order and injunction represent a trailblazing application of the antitrust laws, or instead an improper excursion beyond the outer limits of the Sherman Act, is a matter for another day.” The U.S. Department of Justice filed a statement of interest explaining that “Qualcomm is likely to succeed on the merits because the district court’s decision ignores established antitrust principles and imposes an overly broad remedy.”
The District Court’s ruling can be found here. The Ninth Circuit’s order granting the stay can be found here. The DOJ’s statement of interest can be found here.