The Background

Qualcomm's Contention

In substantiating its claim that the basis of FTC's case is significantly flawed, Qualcomm said it has never withheld or threatened to withhold chip supply in order to obtain agreement to unfair or unreasonable licensing terms. The company also pointed to the rare dissension by Ohlhausen, with the commission deciding to sue by a 2–1 margin.

The company also cried foul over the agency's decision to rush to file the complaint on the eve of Chairwoman Edith Ramirez's departure and the transition to a new administration.

Ohlhausen's Take On The Scenario

In her dissenting statement, Ohlhausen said she sees the FTC action as an enforcement action based on a flawed legal theory that lacks economic and evidentiary support, brought on the eve of a new presidential administration. The commissioner feels the action will undermine U.S. intellectual property rights in Asia and worldwide.

Ohlhausen noted that there is no suggestion in the complaint that Qualcomm charges higher royalties to OEMs that buy non-Qualcomm chipsets. Instead, the complaint dances around that essential element, alleging that Qualcomm's practices disrupt license challenges and bargaining in the shadow of law, and that the ensuing royalties are "elevated," the Commissioner added.

Ohlhausen said, "I have been presented with no robust economic evidence of exclusion and anticompetitive effects, either as to the complaint's core "taxation" theory or to associated allegations like exclusive dealing. What I have been presented with is simply a possibility theorem."

The Dissent Put In Perspective

At last check, Qualcomm was down 12.60 percent at $54.96.