Judge Refuses to Dismiss FTC Lawsuit Against Qualcomm

A U.S. federal judge has denied Qualcomm’s motion to dismiss the Federal Trade Commission’s antitrust lawsuit against it, allowing the case to proceed. Notably, it means the chipmaker must now battle with U.S. regulators as well as contend with the separate $1 billion lawsuit filed by Apple.

U.S. District Judge Lucy Koh made the ruling late Monday, stating that if the FTC’s allegations are true, Qualcomm’s behavior would be anticompetitive. The agency filed the suit against the San Diego-based chipmaker in January, alleging that Qualcomm engages in anticompetitive tactics to maintain a monopoly on the chips it sells. As evidence, the FTC cites the company’s “no license, no chip” policy — in which the company refuses to sell chips unless buyers sign patent agreements and pay the associated fees. Additionally, the FTC claims that Qualcomm engages in other monopolistic tactics, such as refusing to grant patent licenses to its competitors.

Qualcomm, on the other hand, maintains that all of the FTC’s allegations wouldn’t amount to anticompetitive behavior — even if proven true. The San Diego company asked Koh to dismiss the case. “FTC will have the burden to prove its claims, which we continue to believe are without merit,” Qualcomm’s Don Rosenberg said in the wake of the dismissal. “We look forward to further proceedings in which we will be able to develop a more accurate factual record.”

Besides the FTC lawsuit, Qualcomm is also in the midst of a fierce legal battle with Apple. Earlier this month, Cupertino updated its complaint against the chipmaker, alleging that Qualcomm’s “illegal business practices are harming Apple and the entire industry.” In April, Apple said that it would stop paying Qualcomm’s royalties until a court intervenes. In response, the San Diego chipmaker filed lawsuits against several Apple suppliers — a move that Cupertino deemed was indicative of Qualcomm’s “true bullying nature.”