US: Qualcomm vs. FTC arguments wrap up

Lawyers for Qualcomm and the Federal Trade Commission (FTC), after weeks of arguments, have both rested their cases in a trial that could very well inform technological innovation, and America’s role in that innovation, reported CNET.

The key issue in the case is the IP licensing rates Qualcomm charges for access to its massive catalog of standard-essential patents.The FTC has accused Qualcomm of operating a monopoly in the mobile chip market, which hurt rivals and caused handset makers to raise their prices.

For the FTC to win the case, it has the burden of showing that Qualcomm had a monopoly, that it had market power, and that it used that power in negotiations with handset makers to command high royalties. The FTC also has to show that Qualcomm’s conduct hurt competitors and that the anticompetitive actions continue or will start again in the future.

FTC attorney Jennifer Milici kicked things off Tuesday afternoon, January 29, by detailing how Qualcomm used its power in the 3G and 4G chip market to force handset makers like Apple to sign licensing agreements with excessively high royalties. If Qualcomm isn’t stopped, she said, it’ll do the same thing in the 5G market.

Qualcomm attorney Robert Van Nest of law firm Keker, Van Nest & Peters, argued during his closing that the FTC didn’t meet its burden in the case and that Qualcomm won business “through superior innovation and better products.”

“High royalties alone is not the basis for their complaint of harm,” Van Nest said. “They have to show harm to competition.” But he said such harm hasn’t occurred: Intel now supplies all modems for Apple’s iPhones, MediaTek is the world’s second biggest wireless chipmaker, and Samsung and Huawei have developed their own modems.

Qualcomm has been battling the FTC in a San Jose, California, courtroom since January 4. Judge Lucy Koh will now decide the outcome of the case.