Qualcomm’s not a monopoly, Japan decides after decadelong investigation

Qualcomm’s licensing practices have been dealing with scrutiny across the globe. 

Shara Tibken/CNET

Qualcomm is not a monopoly in any case, a Japanese regulatory physique stated Friday, reversing its resolution from a few decade in the past. 

The Japan Fair Trade Commission this week canceled a cease-and-desist order from 2009 that impacted Qualcomm licensing in Japan, successfully declaring that Qualcomm wasn’t responsible of the costs in opposition to it. JFTC officers stated the choice is “unusual,” based on a report from Nippon, and is the primary time it has revoked a cease-and-desist order since 2012. 

The resolution provides Qualcomm a win because it awaits a choose’s resolution within the US’ probe into its enterprise practices. 

“We are very gratified to learn that after years of considering the evidence and applicable legal authority, the Japan Fair Trade Commission has concluded there was nothing improper about Qualcomm’s cross-licensing program,” stated Don Rosenberg, Qualcomm common counsel and government vp, in an announcement. “Today’s decision affirms our confidence that once Qualcomm was afforded a full hearing, and actual evidence was considered, the JFTC would find that our cross-licensing program was completely lawful and the product of arms-length, good-faith negotiations with our Japanese licensees.” 

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Qualcomm is the world’s greatest supplier of cellular chips, and it created know-how that is important for connecting telephones to mobile networks. The firm derives a good portion of its income from licensing these innovations to a whole bunch of machine makers, with the charge based mostly on the worth of the telephone, not the elements. But not all licensees wish to pay as a lot as Qualcomm expenses, and governments around the globe have been investigating Qualcomm’s licensing practices for anticompetitive practices.

Japan in September 2009 stated investigations into Qualcomm discovered it to be violating the nation’s Antimonopoly Act when it got here to commerce practices. The group decided that Qualcomm coerced Japanese handset producers — comparable to Sony — to signal contracts that prevented them from asserting their very own mental property rights. 

“This tends to impede the Japanese manufacturers, etc’s incentive to engage in research and development pertaining to technologies related to CDMA subscriber units, CDMA base stations and semiconductor integrated circuits used therein and tend to further strengthen QUALCOMM’s influential position in the market pertaining to the technologies, thereby tending to impede fair competition in the technology market,” the JFTC stated on the time. 

The Tokyo High Court in 2010 issued a keep on the cease-and-desist order. Since that point, the JFTC held 37 separate hearings on the case, Qualcomm stated, and it rejected an preliminary discovering associated to cross-license agreements between Qualcomm and Japanese producers. But it finally decided that Qualcomm’s licensing practices did not violate antitrust regulation. 

Japan is not the one authorities physique that is investigated Qualcomm. The US, South Korea, China and the European Union are different governments which have scrutinized Qualcomm’s enterprise practices. All have probed whether or not Qualcomm harm competitors by demanding licensing phrases that finally pressured handset makers to completely use its chips. While many have slapped Qualcomm with fines, none have pressured it to alter its licensing practices. 

In China in early 2015, Qualcomm agreed to pay a $975 million high-quality and decrease its licensing charges to settle the dispute in that nation. South Korea slapped it with a $850 million high-quality the next yr, which Qualcomm is interesting. The EU in early 2018 fined Qualcomm $1.23 billion for paying Apple to make use of solely its chips, one thing Qualcomm is also interesting. And in August of that yr, it reached a settlement with Taiwan, the place Tawian would maintain the $93 million Qualcomm had paid, however the firm would not owe something extra.

In January, Qualcomm and the US Federal Trade Commission met in a San Jose, California, courtroom to battle over an antitrust case. The FTC has accused Qualcomm of working a monopoly in wi-fi chips, forcing prospects like Apple to work with it completely and charging extreme licensing charges for its know-how. The case is now in a choose’s palms. 

At the identical time, Qualcomm is battling its former main buyer, Apple. The iPhone big in January 2017 sued Qualcomm over its licensing practices. Qualcomm has filed countersuits and likewise accused Apple of patent infringement. The two have been battling in a San Diego court docket for the previous two weeks over patents and so they’ll meet once more in April over the licensing dispute.

A choose on Thursday dealt Qualcomm a blow within the upcoming licensing case. US District Court Judge Gonzalo P. Curiel of the Southern District of California dominated that Apple can maintain the billions Qualcomm paid it as a part of their 2013 contract. And Qualcomm’s nonetheless on the hook for funds it stopped making.