The Federal Trade Commission’s anti-monopoly lawsuit against Qualcomm Inc. is scheduled to go to trial Jan. 4., regardless of when the partial government shutdown ends.
The commission is accusing the company of violating antitrust laws by employing abusive patent licensing tactics that have allegedly harmed chip competitors, cell phone manufacturers, and consumers.
It’s just one of several ongoing antitrust cases the FTC staff will be working on in 2019 involving companies like Tronox Ltd, Impax Laboratories Inc., and ViroPharma, a unit of Shire Plc.
The Qualcomm trial is expected to proceed even if the partial government shutdown stretches to Jan. 4, FTC spokesman Mitchell Katz told Bloomberg Law. The FTC said in a Dec. 18 court filing that it had no plans to file a motion to stay proceedings in the event of a funding lapse.
U.S. District Judge Lucy Koh in San Jose, Calif., ruled on some of the key issues in the case in a Nov. 6 summary judgment decision that favored the FTC. She held that Qualcomm was required to license patents under commitments the company made to industry groups to provide licenses on “fair and reasonable” terms.
The FTC argues that Qualcomm’s refusal to license patents to competitors like Intel Corp. and Samsung Electronics Co. was part of a monopoly scheme.
“The FTC will still have to prove at trial that the refusal to deal with rivals likely helped Qualcomm maintain a monopoly in modem chips,” Richard Brunell, vice president and general counsel of the American Antitrust Institute, a competition advocacy group in Washington, told Bloomberg Law.
While central questions remain, the summary judgment ruling strengthens the FTC’s position ahead of the trial and could also make Qualcomm more willing to settle. Both sides asked Koh to defer her ruling in an October court filing, saying they were discussing a possible settlement, but she denied the request.
The FTC is challenging Tronox Ltd.’s $1.7 billion deal to buy the titanium-dioxide business of competitor Cristal. In September, U.S. District Judge Trevor McFadden in Washington granted a commission request for an order halting the acquisition pending the outcome of the agency’s challenge to the deal in its in-house administrative court.
The tie-up could hurt competition in the market for titanium dioxide, the white pigment used in paints and plastics, by increasing concentration in an already consolidated market, the FTC alleges. Tronox could seek to settle the agency’s challenge by selling Cristal’s complex in Ashtabula, Ohio.
Drug manufacturer Impax Laboratories Inc. is fending off agency claims that it illegally accepted more than $100 million for delaying release of a generic opioid pain medication. The FTC says Impax and Endo Pharmaceuticals Inc. had a pact in which Impax put off selling its generic version of Opana ER, one of Endo’s core brand drugs, in exchange for a cash payoff.
FTC Chief Administrative Law Judge D. Michael Chappell sided with Impax in a May 2018 decision. The judge said the drug settlement between Impax and Endo wasn’t anticompetitive—as the FTC alleged—but instead was pro-competitive in its effects. The FTC’s staff has appealed Chappell’s decision to the full commission, which heard oral argument in October.
The FTC has sued ViroPharma for allegedly abusing the regulatory system to delay entry of a generic version of one of its medications. The company waged a campaign of “serial, repetitive, and unsupported filings” with the U.S. Food and Drug Administration and courts to delay FDA’s approval of generic Vancocin, costing buyers hundreds of millions of dollars, according to the commission. The case is pending in the U.S. District Court for the District of Delaware, which heard oral argument Dec. 11.
The FTC has accused 1-800 Contacts Inc., the nation’s largest contact lens retailer, of illegally entering into anticompetitive agreements with rivals that inflated product prices.
The commission sued 1-800 Contacts in August 2016, accusing the company of violating Section 5 of the FTC Act by striking deals with at least 14 competitors to eliminate competition in online ad auctions.
In November, the commission issued an opinion requiring 1-800 Contacts to cease and desist from enforcing the agreements and entering into similar arrangements in the future. The decision upheld an October 2017 order by Chappell. The company plans to fight the commission’s ruling in federal court.
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