LEGAL/POLICY

Why Qualcomm Appeals Court Win Is Such A Big Deal

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By Jeff Kagan

First, congratulations to Qualcomm for clearing their name by winning in the United States Appeals Court on a case brought by regulators. Based on what I have been reading and following over the last several years, I think the US Appeals Court got it right. They said regulators were wrong, period and ruled in Qualcomm’s favor.

There are several important lessons I believe everyone should learn from if we want innovation to continue. I will discuss them in this column.

Court said innovation drives economic growth, social well-being

The US Appeals Court order said it well in their own words. “The company has exerted its economic muscle with vigor, imagination, devotion and ingenuity.”

The court decision also said, “innovation is essential to economic growth and social welfare and an erroneous decision will deny large consumer benefits.”

The court gets it. So should every other legal entity, regulator and competitor.

Let’s take a deeper look into what this now means for Qualcomm, for the wireless industry going forward and what can we expect next?

Qualcomm anti-trust case could have killed innovation

Qualcomm has been unfairly and unjustly put through hell in the last several years with this case. If I recall correctly, this started in January 2017 and dragged on and on.

One big problem with this case beyond Qualcomm is that it put a target on the back of innovation.

That’s why this victory is a decision that is much larger than Qualcomm. It impacts every company and innovator in the industry.

Anti-trust is not and should never be used as a competitive tool. It is an important remedy to real problems, that did not exist in this case.

Using anti-trust in this way drives a stake into the heart of innovation. That should be the last thing anyone wants.

So yes, this is great news for Qualcomm, but this is much bigger than Qualcomm. If we pull the camera back, we can see how this impacts every other competitor as well. It impacts innovation and growth for companies and industries.

In this case, anti-trust was used frivolously and for competitive reasons. That harmed innovation and that should never happen again.

Executive Vice President and President of Qualcomm Technology Licensing Alex Rogers said, “The purpose of the company is to innovate and create a platform on which other folks can innovate. The nature of our business model is to enable others to take advantage of this technology and compete. We basically enable horizontal innovation and horizontal competition.”

I think this is a very important lesson every company should learn.

Qualcomm is an important player in wireless

Qualcomm is important. They are one of a very few companies in the world who are key to growth in the wireless industry in company after company, country after country. Their 5G wireless technology is in networks, smartphones, tablets and so much more.

And not only for the wireless industry. Their technology will play an important role in other industries as well like automotive, 5GAA, self-driving cars, healthcare, TeleHealth and TeleMedicine and in fact industry after industry, world-wide over the next decade.

The next decade will be quite important to the wireless industry as it upgrades to 5G. It will also be important to countless other companies in countless other industries who will use this new technology.

Qualcomm anti-trust victory is a landmark decision

There is a very small universe of important competitors in this space of the global wireless industry. The two largest and most important companies in the space today are Qualcomm and Huawei. Ericsson, Nokia and a few others are also important.

Apple is also becoming a real competitor in the chip space.

These companies compete in some areas and work together in other areas. They are all important.

Just like we moved from 2G to 3G to 4G, we are now moving to 5G. Next will be 6G and beyond.

The difference between 4G and 5G has been massive. The move to 5G is even larger. It is not just about wireless companies. It’s not just about a 100 times faster network with low-latency or no delay.

This time, 5G will not only transform the entire, worldwide wireless industry, but it will also transform other companies and other industries.

5G will transform wireless and every other industry

In fact, it is not an overstatement to say 5G will transform our world, completely. The change will be so massive, and it will take place over the next decade.

Just like our lives were changed by smartphones and tablets like the iPhone, Android a decade ago, our entire existence will be changed by 5G going forward, and that is what is so exciting.

Qualcomm is one of a very few companies who are most important to this massive transformation on every level.

That’s why this antitrust case was like a ball and chain they have been dragging around for the last few years. Sure, their growth has been steady and that’s important. Now finally they are free to compete and grow and that’s the way it should be.

Lesson learned: Never use anti-trust as a competitive weapon

However, certain competitors convinced the US Government to bring suit against Qualcomm for competitive reasons. They used this as a competitive tool.

This is simply wrong and should never be allowed to happen again. The trouble is, this seems to be happening more often on so many levels and this simply must stop. It is wrong. Period.

We do not want to kill innovation. Remember, as the US Court of Appeals said, “innovation is essential to economic growth and social welfare and an erroneous decision will deny large consumer benefits.”

We must all learn these lessons and never let this happen again.

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