FTC chairman recused from Qualcomm antitrust litigation: The Capitol Forum

The Capitol Forum (with whom I’m connected on social media) has just broken the following news:

“Qualcomm: Simons Recused from FTC v. Qualcomm Litigation; Democrats at FTC Have De Facto Veto Power Over Consent Agreement”

The subscription service cites “sources familiar with the matter.” They contacted spokespeople for two FTC commissioners and Qualcomm, but they declined to comment or elected not to respond.

One of the sources said the remedy resulting from a settlement could involve arbitration. It’s unclear what exactly would be arbitrated. The question of whether Qualcomm must extend a license to rival chipset makers such as Intel is binary and does not lend itself to arbitration, and I just recently, in connection with Huawei v. Samsung, reiterated my longstanding position on coerced FRAND arbitration.

I don’t know what exactly caused Chairman Simons’s recusal. I do, however, have concerns about the ties of certain key FTC officials (not commissioners, but nevertheless highly influential) with Qualcomm.

While I can imagine why the Capitol Forum’s headline puts the chairman’s recusal into the context of a potentially partisan vote, I absolutely positively don’t view this here as a left-right, conservative-liberal, Republican-Democrat issue. Case in point, no senator was a more positive force in the previous fight against SEP abuse (when Motorola Mobility and Samsung were the culprits) than Sen. Mike Lee (R-Utah). I would recommend to any Republican concerned about the Qualcomm case being a “Democrat” affair to read some of the letters and listen to some of the speeches Senator Lee gave at the time.

No IP/antitrust blogger I know supported Donald Trump’s campaign as early as I did in a January 2016 blog post. On social media, I’ve also declared myself a supporter of such people as “The People’s Sheriff” David Clarke and a big Rush Limbaugh fan. I expressed my disappointment over Judge Robart’s factually and legally erroneous positions on the travel ban, and supported the #ConfirmGorsuch and #ConfirmKavanaugh campaigns. Believe me, if I thought there was anything leftist or heavy-handedly statist (a term Rush also uses from time to time) about the FTC case against Qualcomm, trust me I’d have said so. But there simply isn’t.

An important matter for U.S. innovation and consumers shouldn’t be stigmatized because the FTC filed the lawsuit in the waning days of the Obama Administration. It’s a just cause regardless. I’d be a hundred million times more concerned about some other things Obama and his people did shortly before leaving office, such as sending $221 million to the Palestinian Authority, which is known to make payments to the surviving family members of “martyrs”, or more accurately, suicide terrorists.

The United States is the cradle of antitrust law, and the Qualcomm case, which involves three major U.S. companies (Qualcomm, Apple, Intel), is a key case and an opportunity for the U.S. to assert and maintain its thought leadership.

With a view to future elections, including President Trump’s reelection, I also think it would actually be better for Republicans–of course to the extent that the law and the facts so merit–to pursue the Qualcomm matter since a successful FTC trial would pave the way for a payout to 250 million Americans. In the alternative, if the FTC settled but the class action succeeded regardless, it would look as if Republicans didn’t want people to get some of their money back that they overpaid on past smartphone purchases.

In 2009, Rush Limbaugh famously wanted President Obama to fail, a statement that was widely misunderstood. Now I just find it ridiculous how the former president claims credit for the fruits of President Trump’s #MAGA economic policies. Assuming the FTC v. Qualcomm trial goes forward and succeeds, I don’t think Democrats would be able to get any mileage out of it regardless of when the complaint was filed.

Let us hope that any vote held by the FTC will be driven by fact-specific considerations and principles that are important not to protect companies from the market, but to protect consumers from egregious, abusive conduct.

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