Tying and Exclusion in FRAND Licensing: Evaluating Qualcomm

Erik Hovenkamp and Timothy Simcoe.

In an enforcement action brought by the Federal Trade Commission, a district court recently found that Qualcomm violated the antitrust laws by engaging in anticompetitive exclusive dealing and refusing to license its standard-essential patents (SEPs) to rivals. In this article, we unpack and evaluate three aspects of the Qualcomm decision. First, we describe how the tying relationship between chips and licenses goes primarily in the opposite direction of how most commentators characterize it. Second, we consider how Qualcomm’s commitments to license its SEPs on “fair, reasonable, and nondiscriminatory” (FRAND) terms bear on the antitrust analysis. Third, we discuss how FRAND might have been used to better justify finding an antitrust duty-to-deal with competitors.

SSRN working paper.