Aug. 11 (UPI) — A federal appeals court on Tuesday overturned a 2019 ruling that found the wireless chip maker Qualcomm violated antitrust law.
A three-judge panel from the U.S. Court of Appeals for the 9th Circuit found that while Qualcomm had monopoly power, its practices were not an anti-competitive violation of the Sherman Act as the lower court had ruled.
“Anti-competitive behavior is illegal under federal antitrust law,” the ruling said. “Hyper-competitive behavior is not. Qualcomm has exercised market dominance in the 3G and 4G cellular modem chip markets for many years, and its business practices have played a powerful and disruptive role in those markets, as well as in the broader cellular services and technology markets.”
Citing a separate 2017 appeals case over Tension Envelope and JBM companies competing in the manufacture and sale of envelopes, Judge Consuelo Maria Callahan said in the opinion that Qualcomm, similar to JBM Envelope, “acted with sharp elbows – – as businesses often do.”
Still, the ruling said that unlike anti-competitive behavior, this hyper-competitive activity was not illegal under federal antitrust law.
The ruling also vacated an order for the company to change its business practices, including redoing licensing agreements with smartphone makers such as Apple and Samsung, which generated $4.6 billion in revenue for Qualcomm last year.
Following the decision, Qualcomm shares jumped more than 5%,
“The court’s ruling is disappointing and we will be considering our options,” FTC Bureau of Competition Director Ian Conner said in a statement.
While the appeals court said the case cannot return to the trial judge, the FTC can still ask for the case to be considered by the full appeals court.
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