The Antitrust Week In Review
Here are some of the developments in antitrust news this past week that we found interesting and are following.
U.S. appeals court reverses antitrust ruling against Qualcomm. A U.S. appeals court on Tuesday reversed a lower court ruling against chip supplier Qualcomm Inc. in an antitrust lawsuit brought by the Federal Trade Commission. The U.S. Ninth Circuit Court of Appeals also vacated an injunction that would have required Qualcomm to change its intellectual property licensing practices. The decision was a major vindication for the San Diego-based company, the largest supplier of chips for mobile phones and a key generator of wireless communications technology. Qualcomm was fighting a May 2019 decision by U.S. District Judge Lucy Koh holding that Qualcomm’s practice of requiring phone makers to sign a patent license agreement before selling them chips “strangled competition” and harmed consumers.
How Apple’s 30% App Store Cut Became a Boon and a Headache. Twelve years ago, Apple introduced the App Store, a peculiar online marketplace for the year-old iPhone. It had 500 offerings. Apple told app makers it would take a 30 percent cut of their sales, and few complained. Today, the App Store is one of the world’s largest centers of commerce, facilitating half a trillion dollars in sales last year alone. And Apple still takes 30 percent of many apps’ sales. That commission has proved hugely consequential for Apple. It has been the primary driver of growth in recent years for a company that has nearly $275 billion in annual sales. And it has created some of Apple’s biggest headaches, drawing antitrust scrutiny, fury from app makers and lawsuits from consumers and partners.
Facebook, Snap held talks to buy TikTok rival Dubsmash: Information. Facebook Inc. and Snapchat owner Snap Inc. held talks to buy Dubsmash, the Information reported on Wednesday, putting a spotlight on pop video apps at a time when Microsoft Corp is trying to workout a deal to buy rival TikTok. Facebook and Snap were no longer in deal talks, the report said. “We admire the team but aren’t in active talks to acquire,” a Snap spokesman said. The Dubsmash news comes days after U.S. President Donald Trump threatened to ban China’s TikTok and prohibit transactions with its parent ByteDance, if it does not reach a deal with Microsoft to divest itself in 45 days.
Edited by Gary J. Malone