Automakers fear Qualcomm antitrust win will increase cost of connected cars

Qualcomm is currently seeking to overturn a court ruling that requires it to renegotiate its patent licensing agreements with automakers

The cost of connected cars equipped with 5G technology is likely to increase if Qualcomm's patent licensing practices are not changed, according to automakers.

In their filings in the 9th US Circuit Court of Appeals on 29^th November, trade groups representing leading automakers and automotive suppliers made various claims about the negative effects of Qualcomm's licensing practices.

According to Reuters, the groups - representing the US units of Ford Motor Company, BMW, Toyota and General Motors, among others - argued in their filings that the price of 5G connected cars could skyrocket if Qualcomm wins the case on appeal.

The chip supplier is currently seeking to overturn a court ruling that requires it to renegotiate its patent licensing agreements with automakers at reasonable rates.

In May, Qualcomm lost a legal battle brought by the US Federal Trade Commission (FTC). The US District Court Judge Lucy Koh said in her ruling that Qualcomm had violated antitrust laws by using its power to bully companies into overpaying for patent licences.

The court ordered the company to renegotiate its licensing agreements and to license patented technology to competitors at reasonable rates.

Koh also barred Qualcomm from signing exclusive deals that prevent customers from purchasing modem chips from other firms.

A few weeks later, the US Department of Justice urged the court to temporarily suspend its ruling, arguing that it would diminish Qualcomm's competitiveness in 5G innovation and standard-setting, which could impact US national security.

But Qualcomm's rivals want the anti-trust decision to stand.

Intel told the court that it was forced to sell its smartphone model chip business to Apple at "a multi-billion dollar loss" due to Qualcomm's licensing practices.

Japanese supplier Denso and Germany's Continental AG, which make location-tracking and infotainment technology, alleged that Qualcomm would not license its modem technology to chip makers that charge only a few dollars per chip.

Instead, Qualcomm would prefer signing licenses only with higher-end car makers who would be "less motivated to fight for every dollar" in license fees.

The appeal proceedings are expected to start in January.

In July, the European Union antitrust authorities fined Qualcomm €242m over a price war more than a decade ago, which drove British fabless semiconductor company Icera out of business.

The penalty was levied over alleged predatory pricing between 2009 and 2011, intended to keep Icera out of the market.

Earlier in 2018, Qualcomm was also fined $1.1 billion by the EU over its deal with Apple to use only Qualcomm's chips in its devices.