Qualcomm share price down 11% after losing antitrust case

The chipmaker's stock plummets after a judge rules against the company in an antitrust lawsuit.

US trader after Qualcomm share price falls Source: Bloomberg

Qualcomm share price is down by double digits after a judge ruled against the chipmaker in an antitrust lawsuit brought by the US Federal Trade Commission (FTC). This comes just weeks after Qualcomm settled a patent dispute with Apple.

Why did the FTC sue Qualcomm?

The FTC sued Qualcomm for having anticompetitive practices against other companies making smartphone chips. The agency also alleged that the corporation threatened other tech companies like Apple with excessive licencing fees because of its dominance in the chip market.

US District Judge, Lucy Koh, concluded that Qualcomm violated antitrust policy. Koh wrote in her decision that she agreed with the FTC's claim that Qualcomm knew its practices were anticompetitive and used to punish rivals.

‘This evidence of Qualcomm's intent confirms the court's conclusion that Qualcomm's practices cause anticompetitive harm because no monopolist monopolizes unconscious of what he is doing,’ wrote Koh.

What will Qualcomm have to do after losing the antitrust lawsuit?

As a result of the ruling, Qualcomm has to implement new licencing agreements with phone companies at more reasonable prices. Qualcomm also has to be monitored for compliance for seven years.

How could the antitrust ruling impact Qualcomm?

Analysts at wealth management firm Raymond James noted that if the ruling against Qualcomm isn’t overturned, the decision could hurt Qualcomm’s future profits.

‘If the ruling were to stand, it would have the potential to upend Qualcomm’s licencing model, forcing them to renegotiate agreements with existing licencees, ostensibly at lower rates, and potentially licence technology as a percentage of the much lower chipset price rather than the handset price,’ wrote the analysts.

What is Qualcomm’s reaction to the ruling?

Qualcomm’s general counsel, Don Rosenberg, noted in a statement that the company disagreed with Koh’s decision and would appeal the ruling.

‘We strongly disagree with the judge’s conclusions, her interpretation of the facts and her application of the law,’ said Rosenberg.


This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

See opportunity on a stock?

Don’t miss your chance. Try a risk-free trade in your demo account, and find out whether your hunch could have paid off.

  • Log in to your demo
  • Try a risk-free trade
  • See whether your hunch pays off

See opportunity on a stock?

Don’t miss your chance. Upgrade to a live account to take advantage.

  • Trade a wide range of popular global stocks
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform, when it matters

See opportunity on a stock?

Don’t miss your chance. Log in to take advantage while conditions prevail.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
Bid
Offer
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Bid
Offer
Updated
Change
Bid
Offer
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Sunday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.


For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of spread betting and CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.