US Justice Department asks judge to pause antitrust case against Qualcomm

Posted at 4:46 PM, Jul 16, 2019
and last updated 2019-07-16 19:07:16-04

The US Justice Department has asked a federal appeals court for a temporary pause in a pivotal antitrust ruling involving Qualcomm. The chipmaker is locked in litigation with government regulators over its patent licensing business model.

According to the Department of Justice, national security could be threatened by a May ruling by Judge Lucy Koh, who found that Qualcomm broke competition law by charging cellphone makers high fees for the rights to the company’s wireless equipment.

As a key supplier of 5G technology, Koh’s ruling could hinder Qualcomm — with potential consequences for the United States, the Justice Department said in its filing.

“In the view of the Executive Branch, diminishment of Qualcomm’s competitiveness in 5G innovation and standard-setting would significantly impact US national security,” according to the filing.

The United States is pushing for rapid adoption of 5G mobile data, a successor to 4G LTE that could provide mobile download speeds rivaling the fastest in-home connections. But there are relatively few companies that produce the necessary equipment for the technology. Meanwhile, the Trump administration has also sought to limit the number of suppliers who may serve the American market, barring companies such as Huawei over concerns it could let China eavesdrop on US communications.

The Justice Department was joined Tuesday by statements of support from the Defense Department and the Department of Energy. The Department of Justisce declined to comment. Qualcomm declined to comment.

The suit against Qualcomm was first brought in 2017 by the Federal Trade Commission, which alleged that Qualcomm’s licensing practices violated antitrust law. Koh agreed, saying “Qualcomm’s licensing practices have strangled competition … for years, and harmed rivals, [equipment manufacturers] and end consumers in the process.”

The FTC didn’t immediately respond to a request for comment on the DOJ filing.

Qualcomm had earlier asked Koh for a stay of the ruling, but was rebuffed. The company is currently seeking a stay from the US Court of Appeals for the Ninth Circuit.