Qualcomm illegally suppressed competition in the market for smartphone chips by threatening to cut off supplies and extracting excessive licensing fees.
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The decision was issued by U.S. District Judge Lucy Koh in San Jose, California.
"Qualcomm's licensing practices have strangled competition" in parts of the chip market for years, harming rivals, smartphone makers, and consumers, Koh wrote in a 233-page decision.
She ordered the San Diego-based company to renegotiate licensing agreements at reasonable prices, without threatening to cut off supplies, and ordered that it be monitored for seven years to ensure its compliance.
Qualcomm said it will immediately ask Koh to put her decision on hold, and also seek a quick appeal to the federal appeals court in California.
"We strongly disagree with the judge's conclusions, her interpretation of the facts and her application of the law," general counsel Don Rosenberg said in a statement.
Koh's decision followed a 10-day non-jury trial in January, and is a victory for the U.S. Federal Trade Commission, which has accused Qualcomm in 2017 of violating antitrust law.
The decision followed Qualcomm's settlement of a long-running legal battle with Apple, where Apple agreed once again to use Qualcomm chips in its iPhones, displacing Intel Corp.
It is unclear whether the sanctions will be challenged by the U.S. Department of Justice, which has taken a different view of the case than the FTC and emerged as an ally to Qualcomm.
On May 2, the Justice Department argued Koh should hold a hearing before placing sanctions on Qualcomm. Placing stringent conditions on the company would "reduce competition and innovation in markets for 5G technology," the agency said.
The courts are not required to defer to the Justice Department's recommendations. But "the possibility certainly exists for Qualcomm to prevail upon appeal," given the government's "somewhat schizophrenic" approach to the case, Bernstein analyst Stacy Rasgon wrote. ■