Judge Denies Qualcomm Motion to Dismiss FTC's Lawsuit -- Update
June 27 2017 - 1:51PM
Dow Jones News
By Ted Greenwald
A U.S. federal judge ruled against Qualcomm Inc.'s motion to
dismiss a Federal Trade Commission case that alleges the large
supplier of smartphone chips used its position in the market to
compete unfairly.
The Monday ruling by U.S. District Judge Lucy Koh is a setback
-- though not an unexpected one -- in Qualcomm's broad legal battle
over its business practices. That fight includes a separate lawsuit
filed by Apple Inc. against Qualcomm which makes legal arguments
similar to the U.S. government's.
Judge Koh's decision that the government's case could move
forward rejected Qualcomm's claim, filed in April in a Northern
California federal district court, that the FTC's complaint failed
to support even basic elements of an antitrust violation.
The FTC says Qualcomm, whose technology is used in almost all
smartphones, acts unfairly by refusing to sell its chips to handset
makers that don't buy a license to use its patents -- which are
deemed essential to cellular communications -- and by refusing to
sell licenses to competing chip makers. The government says
Qualcomm further impaired competition by using its dominant
position to compel Apple to use its chips exclusively.
Motions to dismiss such suits generally have slim chances of
acceptance, legal experts said, because the judge is required to
accept the plaintiff's factual allegations as true and the
defendant must persuade the judge that a lawsuit presents no
grounds to argue the case.
"We respect the Court's decision, which is based on the legal
standards that apply at this early stage of the case," said
Qualcomm general counsel Don Rosenberg in a statement, adding that
"the FTC will have the burden to prove its claims which we continue
to believe are without merit."
The FTC's action faces an uncertain future despite the judge's
ruling. The case was filed during the waning days of the Obama
administration, and Maureen Ohlhausen, then the commission's lone
Republican, dissented from the FTC's move to file the lawsuit.
Under President Donald Trump, Ms. Ohlhausen became acting FTC
chair, and several commission seats are unfilled. If Republicans
come to make up a majority on the commission, she may call a vote
on whether to withdraw the case.
Write to Ted Greenwald at Ted.Greenwald@wsj.com
(END) Dow Jones Newswires
June 27, 2017 13:36 ET (17:36 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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