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Qualcomm’s “No License, No Chips” Program Violates Antitrust Laws

On May 21, 2019, following a full trial on the merits, Judge Koh of the Northern District of California issued a 233-page opinion in a closely watched case between the Federal Trade Commission (“FTC”) and Qualcomm, one of the largest chip suppliers in the world. See FTC v. Qualcomm Inc., No. 17-CV-00220-LHK, slip op. (N.D. Cal. May 21, 2019). In a decision Qualcomm has vowed swiftly to appeal, Judge Koh found violations of Sections 1 and 2 of the Sherman Act (and, therefore, a violation of Section 5 of the FTC Act) and invalidated Qualcomm’s “No License, No Chip” business model, condemned discounts characterized as de facto exclusive dealing, and entered an injunction upending Qualcomm’s business model. Depending on how the appeal fares, the decision may have significant implications for licensing practices of holders of Standard Essential Patents (“SEPs”), including for 5G and the Internet of Things (“IoT”).

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HSR Thresholds Decrease


Time to Read: 1 minutes Practices: Antitrust, Private Equity

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The Federal Trade Commission has announced lower thresholds under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “Act”) for transactions closing on or after February 22, 2010. The new thresholds reflect a roughly 3% decrease to the thresholds currently in effect.

The changes, which are authorized by amendments to the Act in 2000, are based on changes in the gross national product, and reflect the first decrease of the thresholds under the Act.

  • Size-of-Transaction Test. The $50 million (as adjusted) threshold used in the size-of-transaction test will decrease from $65.2 million to $63.4 million.
  • Size-of-Persons Test. The $10 million (as adjusted) and $100 million (as adjusted) sales and assets thresholds used in the size-of-persons test will decrease from $13 million to $12.7 million and from $130.3 million to $126.9 million, respectively.
    The $200 million (as adjusted), threshold, below which the size-of-persons test applies, will decrease from $260.7 million to $253.7 million.  
  • Filing Fees. Filing fee thresholds based upon the value of the voting securities or assets to be held as a result of the acquisition will be revised as follows:

Value of Transaction

Filing Fee

$63.4 to $126.9 million
(previously $65.2 to $130.3 million)

$45,000

$126.9 to $634.4 million
(previously $130.3 to $651.7 million)

$125,000

$634.4 million or more
(previously $651.7 million or more)

$280,000

 

If you have questions or would like more information, please contact one of the attorneys listed above or the Ropes & Gray attorney that usually advises you.

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