ASSESSMENTS

What Does the New Qualcomm Ruling Mean for 5G and the U.S.-China Tech War?

May 23, 2019 | 09:30 GMT

A smartphone displays Qualcomm's company logo. A U.S. federal judge has ruled in favor of the U.S. Federal Trade Commission against U.S. 5G tech leader Qualcomm, declaring that the company broke antitrust laws.

IGOR GOLVNIOV/SOPA Images/LightRocket via Getty Images)

Highlights

A U.S. district judge has ruled in favor of the U.S. Federal Trade Commission against U.S. 5G tech leader Qualcomm, declaring that the company broke antitrust laws.
Qualcomm will almost certainly appeal the ruling, but the company's business model is at risk, along with its ability to fund and finance crucial research and development for future wireless communications technology.
Qualcomm leads the U.S. development of essential standard-setting patents for future wireless technology. Legal limitations against it will likely benefit the United States' tech war adversary, China.
In just one week, the two most important global 5G players — China's Huawei and the United States' Qualcomm — have experienced assaults on their fundamental business models that could dramatically reorder the development and sales processes in the global 5G sector.

In what could become a landmark case, a U.S. district judge on May 21 sided with the U.S. Federal Trade Commission against Qualcomm over its licensing prices. Judge Lucy Koh said that the San Diego-based telecommunications innovator broke U.S. antitrust law by "strangling competition" in the semiconductor chip industry and using its position as a key patent holder to demand unreasonably high licensing fees. Qualcomm will almost certainly appeal the ruling to a higher court, but if it stands, Koh's decision will hit at the heart of Qualcomm's business model, weakening the company at a time when it is in a heated competition with Chinese tech developers....

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