May 3, 2019 / 12:25 AM / 3 months ago

U.S. Justice Department asks for hearing in Qualcomm antitrust case

(Reuters) - The U.S. Department of Justice’s antitrust division asked a federal judge on Thursday to hold a hearing on any possible remedies to be imposed if mobile chip supplier Qualcomm Inc is found liable in an antitrust lawsuit brought by the U.S. Federal Trade Commission.

FILE PHOTO: The logo of Qualcomm is seen during the Mobile World Congress in Barcelona, Spain February 27, 2018. REUTERS/Yves Herman

The FTC took Qualcomm to trial in January and is awaiting a decision in federal court in California.

The Justice Department’s filing asked Judge Lucy Koh of the U.S. District Court of the Northern District of California to hold a hearing on any possible remedies if she finds Qualcomm liable for antitrust violations and argued that “a remedy should work as little injury as possible to other public policies,” according to the filing.

The Justice Department said that any penalties Judge Koh might impose should not hamper the market for 5G, the next generation of mobile networks that are expected to be up to 100 times faster than current networks. The United States, China and Korea will roll out those networks this year and next, and Qualcomm makes so-called modem chips that allow smart phones and other devices to connect to those networks.

“(T)here 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 Justice Department wrote. “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.”

Qualcomm and the Justice Department did not immediately return a request for comment.

The FTC sued Qualcomm more than two years ago over allegations the company used anticompetitive patent licensing practices to maintain a monopoly on the market for premium modem chips.

The claims in the case mirrored similar antitrust claims made by iPhone maker Apple Inc. The two sides settled during opening arguments at the trial between Apple and Qualcomm.

The FTC’s case was filed in the final days of President Barack Obama’s administration, with the lone Republican-appointed commissioner at the time formally dissenting against the action. Antitrust experts widely expected the case to be dismissed when President Donald Trump’s appointees constituted a majority of the five-member commission.

But FTC Chairman Joseph J. Simons recused himself from voting on the Qualcomm case because of prior work he had done for the chip supplier while in private practice. Antitrust experts believe that left the commission’s Democratic and Republican appointees deadlocked at 2-2 on the matter, which prevented the Republican-appointed commissioners from voting to dismiss the case and allowed it to proceed to trial.

Reporting by Stephen Nellis in San Francisco; Editing by Sandra Maler, Peter Cooney and Cynthia Osterman

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