US technology major Qualcomm fails in getting chip monopoly allegation dismissed from California court

US technology major Qualcomm fails in getting chip monopoly allegation dismissed from California court

Qualcomm has been charged with agreement manipulation that caused millions of mobile phone and tablet owners to artificially pay more for their devices

The American multinational wireless company Qualcomm Inc has lost an initial legal bid to get dismissed allegations that its chip-making business conduct has caused millions of mobile phone and tablet owners to artificially pay more for their devices.

In its January 6 ruling, US District Judge Jacqueline Scott Corley in San Jose, California, refused to throw out a civil consumer lawsuit alleging that Qualcomm violated California state antitrust law.

The lawsuit claims that Qualcomm through exclusive dealing relationships with Apple Inc and other part suppliers and device makers to maintain a monopoly in the modem chip market.

Judge Corley, however, dismissed an allegation that Qualcomm unlawfully tied together the sale of its chips and patent licensing.

San Diego-based Qualcomm has the option of still trying to defeat the case entirely at a later stage in the litigation. Judge Corley has fixed February 23 as the next date of hearing in the case.

Qualcomm had taken up a stand that all of the plaintiffs' claims were barred after the US Federal Trade Commission in 2020 lost on appeal a case with similar allegations. The 9th US Circuit Court of Appeal in the Federal Trade Commission case had ruled that Qualcomm's practices did not violate federal antitrust law.

A Qualcomm spokesperson has said that the San Jose court ruling has now narrowed the plaintiffs' remaining case, leaving only allegations of exclusive dealing claims. The spokesperson added that Qualcomm has a strong defence against this.

Judge Corley held that the factual record in the Federal Trade Commission case did not bind plaintiffs here as they were not parties in the FTC vs Qualcomm case.

Lawyers for the plaintiffs contended that the manufacturers overpaid for chips by more than $9 billion during the class period between 2011 and 2018.

Qualcomm's attorneys had sought dismissal of the lawsuit based on the failure of the Federal Trade Commission case.

In September 2021, the 9th Circuit scrapped a nationwide class in the case that was estimated to include up to 250 million members. Damages on the lower end at that time were estimated at $4.8 billion.

Judge Corley has not certified any new class in the present case.