(Reuters) – The U.S. Justice Department asked a federal appeals court to pause the enforcement of a sweeping antitrust ruling against mobile chip supplier Qualcomm Inc on Tuesday, citing support from the Energy Department and Defense Department.
FILE PHOTO: A Qualcomm sign is pictured at Mobile World Congress (MWC) in Shanghai, China June 28, 2019. REUTERS/Aly Song
“For DoD, Qualcomm is a key player both in terms of its trusted supply chain and as a leader in innovation, and it would be impossible to replace Qualcomm’s critical role in 5G technology in the short term,” Ellen M. Lord, Under Secretary for Defense for Acquisition and Sustainment, wrote in a filing made in the 9th Circuit Court of Appeals.
Qualcomm, the largest supplier of modem chips that connect smartphones to wireless data networks, on May 21 lost in an antitrust lawsuit brought by the Federal Trade Commission earlier this year.
U.S. District Judge Lucy Koh ruled that Qualcomm had engaged in anticompetitive patent-licensing practices to keep a monopoly on the mobile chip market. Koh ordered Qualcomm to license its technology to rival chipmakers, which include firms like Taiwan’s MediaTek Inc and Huawei Technologies Co Ltd’s HiSilicon chip unit.
Qualcomm has been fighting to have the ruling put on hold while it pursues an appeal. The San Diego, California, company has argued that letting the ruling stand could upend its talks with phone makers over chips for 5G, the next generation of wireless data networks.
Koh declined to pause the ruling, bringing the case before the 9th Circuit.
The Justice Department’s antitrust division had asked Koh to hold an additional hearing about potential penalties before she made her ruling, but she declined to do so.
In a friend of the court filing on Tuesday, Justice Department attorneys argued her ruling was “erroneous” and called her decision to forego additional hearings “unlawful.”
Energy Department officials also filed in favor of a pause.
“DOE’s missions in nuclear security and protection of the Nation’s energy and nuclear infrastructure are dependent on secure and advanced wireless communications, of which Qualcomm is the major and predominant U.S. supplier of both current generation and upcoming 5G chipsets,” wrote chief information officer Max Everett.
Lord wrote that the Defense Department “firmly believes that any measure that inappropriately limits Qualcomm’s technological leadership, ability to invest in research and development, and market competitiveness, even in the short-term, could harm national security.”
Reporting by Stephen Nellis in San Francisco; Editing by Richard Chang and Sonya Hepinstall