Last year, not too long after Apple abruptly settled its long-running lawsuit with Qualcomm, the chipmaker was hit with a ruling that its business practices were anticompetitive in a case brought by the Federal Trade Commission. After a year-long period to appeal that decision, Qualcomm today has won its bid to reverse that ruling.
As part of the FTC case decision from the US Court of Appeals 9th Circuit last year, Qualcomm was going to be ordered to renegotiate its licensing deals. However, the company appealed the decision and the ruling has now been given over a year later.
Reported by Bloomberg, the Qualcomm appeal victory is likely worth billions of dollars.
The ruling Tuesday by a three-judge panel is a blow to the Federal Trade Commission, which last year won an order requiring the company to renegotiate patent licenses worth billions of dollars with phone makers.
At the time of writing, Qualcomm’s stock was up almost 5% on the news.
Qualcomm argued in the appeal that “its licensing business benefits the whole industry by speeding up improvements to smartphones and the services they support.”
And highlighted that “it doesn’t stop rival chipmakers from accessing its technology. Instead, fees are charged to phone makers who pay a percentage of the selling price of each handset.”
Noted by Bloomberg, a factor in the reversal of last year’s ruling was certainly the US Department of Justice siding with Qualcomm instead of the FTC.
In a rare split among antitrust regulators, the U.S. Justice Department lined upwith Qualcomm against the FTC , arguing that Koh’s ruling could undermine American leadership in technologies including 5G wireless networks.
Last year when Apple settled its lawsuit with Qualcomm, it signed a licensing deal that goes through 2025 for modem chips with an option to extend that up to two more years. Meanwhile, Apple is working on developing its own modems so it won’t be reliant on Qualcomm long-term.