(Reuters) – Qualcomm illegally suppressed competition in the market for smartphone chips by threatening to cut supplies and extracting excessive license fees, a US judge ruled, a decision that could force the company to overtake its business practices.
The decision issued late Tuesday night by the US District Judge Lucy Koh in San Jose, California, caused Qualcomm shares to shed 9.5 percent in early trading on Wednesday.
"Qualcomm's licensing practice has squeezed competition" in parts of the chip The market for many years has harmed rivals, smartphone manufacturers, and consumers, and Koh wrote in a 233-page decision.
She ordered the San Diego-based company to renegotiate reasonable-price license agreements without threatening to cut supplies and ordering it to be monitored for seven years to ensure compliance.
Qualcomm said it would promptly ask Koh to settle his decision and also seek a quick appeal to t He is a federal appeal court in California.
"We strongly disagree with the judge's conclusions, her interpretation of the facts and her application of the law," Secretary-General Don Rosenberg stated in a statement.
Koh's decision followed a 1
The decision followed Qualcomm's April 16 settlement of a long-standing legal battle with Apple, where Apple once again agreed to use Qualcomm chips in its iPhones, which tell Intel.
It is unclear whether the sanctions will be challenged by the US Department of Justice, which had asked Koh on May 2 to hold a hearing on that case if Qualcomm was found liable.
"The opportunity is certainly for Qualcomm to rule by appeal" given the government's "slightly schizophrenic" approach to the case, with the FTC and the Ministry of Justice appearing in odds, the Bernstein analyst Stacy Rasgon wrote.
The Ministry of Justice was not immediately available for comments Wednesday.
Koh sa Qualcomm engaged in "extensive" competitive behavior aimed at more than a dozen original equipment manufacturers such as Apple, BlackBerry, Huawei, Lenovo, LG, Motorola, Samsung and Sony, often by cutting out or threatened to cut off supplies or provide technical support.
She also said Qualcomm's monopoly power in modem chips
"With practices that result in exclusivity and eliminate opportunities to compete for OEM business, Qualcomm undermines rivals in every aspect," she wrote.
She also found Qualcomm knew that the licensing practice damaged the competition "nonetheless continued" despite government inquiries in China, Japan, K Orea, Taiwan, the EU and the United States.
"This evidence of Qualcomm's intent confirms the Court's conclusion that Qualcomm's practice is causing competitive damage because no monopoly is unconsciously monopolized by what he does," she wrote.
Koh also said the testimony of some Qualcomm witnesses "lacked credibility", failing CEO Steve Mollenkopf and others to provide "long, quick and practiced stories" and say the company's e-mails and notes opposed his testimony.
"It will be difficult for an appellate court to disrupt court findings on the truth of Qualcomm witnesses and conclusions reached based on these findings," said Barbara Sicalides, a partner at Pepper Hamilton in Philadelphia, who specializes in antitrust law. 19659002] Qualcomm makes mobile phone processors and modem chips, but generates the most profits by licensing its technology to mobile makers.
Rasgon, Bernste I an analyst said Koh had been leaning against Qualcomm, but some investors had hoped her vision would be " softened "by the Apple settlement.
" Apparently not, "wrote Rasgon.