The U.S. government’s antitrust win over chip provider Qualcomm drew tough questions for the Federal Trade Commission (FTC) from a board of three appellate judges in San Francisco Thursday.
The U.S. 9th Circuit Court of Appeals heard oral disputes in a closely observed case the regulator brought against Qualcomm back in 2017.
California stationed Qualcomm supplies modem chips that connect phones and other gadgets to wireless networks; however, patent licensing drives most of its income.
The company is contesting a May 2019 decision by U.S. District Judge Lucy Koh.
That judge sided with antitrust regulators, writing that Qualcomm’s practice of obligating phone manufacturers to seal a patent license agreement before selling them chips “strangled competitors” and harmed customers
The committee of judges inquired the FTC on how Qualcomm might have violated antitrust legislation, even if the corporate did use its dominant position in the chip market to gain higher patent royalties.
The FTC argued Qualcomm utilized an excessive “surcharge” to phone manufacturers, charging them too high a price for patent licenses because the phone makers needed to sign the agreements to get Qualcomm’s chips.
Brian Fletcher, a law professor from Stanford University brought in by the FTC, responded that phone manufacturers couldn’t challenge the patent prices in negotiations or other court proceedings for fear of losing access to Qualcomm’s chips.