Just a month after settling a long-running legal fight with Apple, Qualcomm finds itself faced with new uncertainty after a judge ruled in a case brought by the Federal Trade Commission that it illegally suppressed competition in the market for wireless device chips. The decision, issued late Tuesday by U.S. District Judge Lucy Koh, found that Qualcomm charged too much in royalties for its patents and questioned the company’s approach of charging royalties on a percentage of a smartphone’s price.
Apple executives figured prominently in testimony against Qualcomm, which included allegations that Qualcomm used exclusivity deals and refused to sell other companies chips without a license. Qualcomm said it would seek an immediate stay of the decision and would appeal. Shares in Qualcomm dropped 11% percent on Wednesday.
In the ruling, the judged seemed to ignore U.S. agencies, including the Departments of Defense and Energy, which had voiced public support of Qualcomm in the case. The Justice Department had gone so far as to ask for a hearing on any penalties imposed on the company, citing its central role in developing next-generation wireless equipment.