The Department of Justice wants the legal system to go lenient on Qualcomm as the telecommunications giant wrestles with a Federal Trade Commission lawsuit claiming the company is a monopoly.
“[I]n the event that the court finds liability on any of the FTC’s claims, the court should order additional briefing and hold a hearing on issues related to a remedy,” the DOJ said in a statement of interest filed in a U.S. district court in California. The court should be careful, the DOJ added, noting its concerns that a punishment could affect fifth generation mobile phone development.
“There is a plausible prospect that an overly broad remedy in this case could reduce competition and innovation in markets for 5G technology and downstream applications that rely on that technology,” the DOJ wrote Thursday. “Such an outcome could exceed the appropriate scope of an equitable antitrust remedy. Moreover, it has the distinct potential to harm rather than help competition.”
Officials are not happy with the lawsuit. Representatives with the Department of Defense, for instance, had sit-down discussions with the FTC in March to encourage the agency to stop suing Qualcomm. They argued that financial losses from a court defeat would hamper Qualcomm’s ability to compete with China’s top chip maker, Huawei.
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Qualcomm’s legal troubles began in 2017 when Apple started complaining that some of the technology in the telecom’s patent bundle also is in its chips. In short, Qualcomm is getting paid twice for the same technology, Apple argued. The FTC sued Qualcomm in January 2017 as well over the same complicated reason.
Apple licensed Qualcomm’s technology for the iPhone, helping the phone maker break into the wireless industry. The decision allowed Apple to concentrate on making touchscreen computers and helped turn marketing genius Steve Jobs’ project into the most valuable company on Earth.
The companies finally agreed in April to dismiss all litigation stemming from the disagreement, with both companies hammering out a six-year licensing agreement and a multiyear supply agreement. Apple will pay Qualcomm an unspecified amount, according to the companies’ statement.
Meanwhile, the Trump administration is targeting Huawei, one of Qualcomm’s biggest competitors, in a seemingly unrelated matter. The DOD charged the Chinese telecommunications giant in January on several counts of fraud as President Donald Trump applies more pressure on China’s beleaguered economy.
Officials accused executive Meng Wanzhou of bank fraud, wire fraud and violating U.S. sanctions on Iran. Meng, the CFO of Huawei and daughter of the company’s founder, was arrested in December 2018 in Vancouver by the Canadian Justice Department. China warned Canada in December that it faces“severe consequences” if officials don’t release the executive.
Trump continues to press U.S. telecommunications companies to blow past China. “I want 5G, and even 6G, technology in the United States as soon as possible. It is far more powerful, faster, and smarter than the current standard,” the president told his Twitter followers in February.
Neither the FTC nor Qualcomm have responded to The Daily Caller News Foundation’s request for comment about the DOJ’s request for leniency.
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