Qualcomm Loses Antitrust Case, Ordered To Shut Down Monoply

On Tuesday, Lucy Koh, Judge of the US District Court in San Jose has ruled that Qualcomm has abused its powerful position in the modem chip industry to harm other competitors as well as overcharge device makers. The chip-making giant is facing massive pressure to reconstruct its core business.

The monopoly of Qualcomm will be soon overhauled. The decision issued by Judge Lucy Koh is said to follow a case that the FTC (Federal Trade Commission) filed against Qualcomm in 2017. The company was accused of the same practices, which is considered as anticompetitive. One of the most noticeable acts was that Qualcomm did force smartphone companies to pay a “tax” if they use processors from the company’s rivals.

The company is said to still engage in other unfair conducts, including holding monopoly power in the 5G smartphone chip market due to its dominant position. The court did require Qualcomm to practice fairly by making its patent licensing available to other chip-making competitors. The company also must not strike exclusive chip supplies to phone makers in order to keep away the monopoly potential. To track the orders, FTC demands Qualcomm to fulfill the report on an annual basis for the next seven years.

For now, Qualcomm is definitely the biggest supplier of modem chips for handset makers in the world. The company was well-known due to creating the essential technology helping phones connect to cellular networks. A substantial portion of all revenues was derived from charging patent license as well as the extensive "tax" to several device makers. Notably, the fee will be charged based on the value of final products having its chips inside, not the components. Furthermore, even when a mobile maker doesn’t use its chipsets but building a handset and connecting to cellular networks, it was demanded to pay a fee for the chip-making giant.