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Carmakers appeal U.S. FTC after facing defeat in Qualcomm case

Carmakers appeal U.S. FTC after facing defeat in Qualcomm case
Carmakers appeal U.S. FTC after facing defeat in Qualcomm case

Tech firms and car manufacturers plea to reverse the judgment on the grounds of unfair market practices

Companies like Ford, Tesla, Daimler, Honda, MediaTek and Intel are rallying against the court ruling which was in favor of Qualcomm. Companies are urging the U.S. Federal Trade Commission (FTC)  to take stern action against the chipmaker’s inappropriate sales practices.

Reportedly, before selling its chips, Qualcomm requests consumers to sign patent license agreements. Such practices have raised concerns, alleging the company of stifling its competition. However, Qualcomm is willing to contest these claims. 

Earlier in January 2017, the FTC had lodged a complaint against the chipmaker for using “anticompetitive tactics” to create a monopoly over the semiconductor and smartphone industry. The federal regulators had stressed that these approaches harmed both consumers and competition while creating a hard time for smartphone manufacturers like Apple, forcing them to pay higher prices for Qualcomm chips.

Consequently, in May 2019, a US district judge ruled in favor of FTC and warned Qualcomm to change its patent licensing practices. However, earlier in August, a council of judges from the Ninth Circuit Court of Appeals decided to revert this decision.

Both tech and automotive firms wrote a letter to the federal regulators stating that if the monopolistic practice continued, the market dynamics could drastically change and might result in the destabilization of the standards ecosystem, thereby encouraging the abuse of market power.

To sum it up, Glyn Moody, a journalist with immense expertise in tech policies, said that with the integration of smart solutions and technologies in normal as well as autonomous cars, the automobile sector is steadily becoming more reliant on the technology industry. This has fueled worries of car manufacturers towards Qualcomm's patent practices.

Automakers have learned a great deal from the 4G battle and are concerned that this practice would bolster Qualcomm's position as it fights to ascertain dominance over the 5G technology market.

Source Credit: https://www.bbc.com/news/business-53897401