1 

1

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

STATEMENT OF INTEREST OF THE UNITED STATES

Case No. 5:17-cv-00220-LHK

ANDREW C. FINCH

Principal Deputy Assistant Attorney General 

DAVID L. ANDERSON (CABN 149604)

United States Attorney 

MICHAEL F. MURRAY

Deputy Assistant Attorney General 

WILLIAM J. RINNER

Chief of Staff and Senior Counsel 

DANIEL E. HAAR

Acting Chief, Competition Policy & 

Advocacy Section

U.S. Department of Justice 

Antitrust Division

950 Pennsylvania Avenue, N.W. 

Office 3230 

Washington, D.C. 20530-0001 

(202) 598-2846 

daniel.haar@usdoj.gov 

Attorneys for the United States

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION 

FEDERAL TRADE COMMISSION,

Plaintiff,

v. 

QUALCOMM INCORPORATED, 

Defendant.

Case No. 5:17-cv-00220-LHK

STATEMENT OF INTEREST OF THE 

UNITED STATES OF AMERICA

Case 5:17-cv-00220-LHK Document 1487 Filed 05/02/19 Page 1 of 7
2 

1

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

STATEMENT OF INTEREST OF THE UNITED STATES

Case No. 5:17-cv-00220-LHK

I. INTRODUCTION

The United States respectfully submits this Statement of Interest, pursuant to 28 U.S.C.

§ 517, to advise the Court of its interests in this matter with respect to the enforcement of the

antitrust laws and the protection of competition and innovation for the benefit of consumers.1

The United States respectfully submits that, in the event that the Court finds liability on 

any of the FTC’s claims, the Court should order additional briefing and hold a hearing on issues 

related to a remedy.2

 The United States further submits that, in fashioning a remedy, the Court 

should take careful consideration of all relevant issues and effects of such a remedy. That 

includes the principle that, although a proper remedy must restore any competition lost due to 

actions found to have violated the antitrust laws, a remedy should work as little injury as possible 

to other public policies. The United States underscores, however, that it takes no position at this 

time on the underlying merits of the FTC’s claims or on any other issues related to the Court’s 

pending determination of liability. 

II. BACKGROUND

The Federal Trade Commission filed this action on January 17, 2017, alleging that

various practices of Qualcomm related to its licensing of patents essential for technological 

standards involving cellular telephones and its sales of baseband processors (or “chips”) violated 

Section 5 of the FTC Act, which is largely premised on legal standards incorporated from 

1

 Pursuant to 28 U.S.C. § 517, “[t]he Solicitor General, or any officer of the Department of 

Justice, may be sent by the Attorney General to any State or district in the United States to attend 

to the interests of the United States in a suit pending in any court of the United States, or in a 

court of a State, or to attend to any other interest of the United States.” The filing of a Statement 

of Interest pursuant to § 517 does not constitute intervention and does not make the United States 

a party to the proceeding. 2

 Nothing in this Statement of Interest is intended to apply to a case where a defendant does not 

dispute the appropriate remedy and agrees to a proposed consent judgment with the government. 

See 15 U.S.C. § 16(b)–(h).

Case 5:17-cv-00220-LHK Document 1487 Filed 05/02/19 Page 2 of 7
3 

1

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

STATEMENT OF INTEREST OF THE UNITED STATES

Case No. 5:17-cv-00220-LHK

Section 2 of the Sherman Act.3 See Complaint ¶ 147. 

In the parties’ Joint Pretrial Statement, the FTC requested that if Qualcomm is found 

liable for violating the FTC Act, it should be ordered (among other things) to renegotiate its 

existing licensing agreements—a request that does not appear to be limited to those licenses 

affected by Qualcomm’s allegedly anticompetitive practices in the relevant markets. See Joint 

Pretrial Statement at 3. The United States understands that the now-completed trial itself 

focused almost exclusively on issues related to liability, and the Court has not requested posttrial briefing or scheduled a post-trial hearing on remedy. The Court did, however, indicate a 

willingness to entertain briefing and potentially discovery on the issue of remedy if it finds for 

the FTC on liability.4

 

III. ARGUMENT

A. If the Court Finds Liability, an Evidentiary Hearing Is Necessary Before the 

Imposition of a Remedy 

If the Court finds that Qualcomm has violated the FTC Act, it should permit additional 

briefing and schedule an evidentiary hearing to resolve any disputes regarding the scope and 

impact of injunctive relief. “It is a cardinal principle of our system of justice that factual disputes 

must be heard in open court and resolved through trial-like evidentiary proceedings.” United 

States v. Microsoft Corp., 253 F.3d 34, 101 (D.C. Cir. 2001). In antitrust trials, as in other civil 

cases, therefore, “[a] party has the right to judicial resolution of disputed facts not just as to the 

liability phase, but also as to appropriate relief.” Id. In Microsoft, the D.C. Circuit reversed the 

 

3

 Even though the FTC does not directly enforce the Sherman Act, courts have held that a 

violation of the Sherman Act constitutes an unlawful “unfair method of competition” under 

Section 5 of the FTC Act, 15 U.S.C. § 45. See, e.g., FTC v. Cement Inst., 333 U.S. 683, 691–93 

(1948). The United States takes no position on the contours of the FTC Act’s prohibition. 

4 See Oct. 24, 2018 Hr’g Tr. at 38:23–40:4. 

Case 5:17-cv-00220-LHK Document 1487 Filed 05/02/19 Page 3 of 7
4 

1

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

STATEMENT OF INTEREST OF THE UNITED STATES

Case No. 5:17-cv-00220-LHK

district court’s order of divestiture in a government case alleging violations of Section 2 of the 

Sherman Act because, among other independent reasons, the court failed to hold an evidentiary 

hearing despite Microsoft’s request for one. The court of appeals explained that “a trial on 

liability . . . does not substitute for a relief-specific evidentiary hearing unless the matter of relief 

was part of the trial on liability.” Id. There are “exceptions to the requirement for an evidentiary 

hearing only when facts are not in dispute or when parties waive an evidentiary hearing.” Idaho 

Watersheds Project v. Hahn, 307 F.3d 815, 830 (9th Cir. 2002); see also Chicago Bridge & Iron 

Co. N.V. v. FTC, 534 F.3d 410, 442 (5th Cir. 2008) (hearing generally required where “new 

evidence was not presented at trial or important factual issues were not resolved by the trier of 

fact in respect to the remedy”).

Holding a hearing on the appropriate remedy is vital in monopolization cases because the 

obligations courts impose often have far-reaching effects and can re-shape entire industries.5

 As 

one previous head of the Antitrust Division put it, “Section 2 remedies should not crush a tiger’s 

spirit; they should train, not tame. Among other things, this means that equitable remedies should 

not interfere with the defendant’s innovation incentives going forward.” Thomas O. Barnett, 

Section 2 Remedies: What to Do After Catching the Tiger by the Tail, 76 Antitrust L.J. 31, 35 

(2009). The effects of an antitrust remedy, however, are not always intended; if overly broad, a 

remedy ultimately may cause harm to competition and consumers. See 3 Philip E. Areeda & 

Herbert Hovenkamp, Antitrust Law ¶ 653e, at 152 (4th ed. 2016) (“Wholly apart from fairness, . . 

. a policy [of far reaching equitable sanctions] would undesirably deter firms from engaging in 

superficially restrictive conduct that is in fact reasonably necessary to competition on the 

 

5 By contrast, a separate hearing on remedies may be unnecessary in a typical challenge to an 

unconsummated merger under Section 7 of the Clayton Act, 15 U.S.C. § 18, where the 

predominant effect of an injunction would be to preserve the status quo ante. 

Case 5:17-cv-00220-LHK Document 1487 Filed 05/02/19 Page 4 of 7
5 

1

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

STATEMENT OF INTEREST OF THE UNITED STATES

Case No. 5:17-cv-00220-LHK

merits.”); see also William F. Baxter, Separation of Powers, Prosecutorial Discretion, and the 

‘Common Law’ Nature of Antitrust Law, 60 Tex. L. Rev. 661, 699 (1982) (discussing how 

antitrust judgments can “unreasonably restrain competition”).

Indeed, there is a plausible prospect that an overly broad remedy in this case could reduce 

competition and innovation in markets for 5G technology and downstream applications that rely 

on that technology.6 Such an outcome could exceed the appropriate scope of an equitable 

antitrust remedy. Moreover, it has the distinct potential to harm rather than help competition.

For these reasons, the United States respectfully submits that this Court should order 

additional briefing and hold an evidentiary hearing, focused on these and other remedial issues. 

B. Antitrust Remedies Should Do as Little Harm as Possible to Other Public 

Policies

It is black-letter antitrust law that, upon a finding of liability, “[a]ntitrust relief should 

unfetter a market from anticompetitive conduct and pry open to competition a market that has 

been closed by defendants’ illegal restraints.” Ford Motor Co. v. United States, 405 U.S. 562, 

577–78 (1972). Although antitrust law violators “must expect some fencing in” from a remedy 

that fully restores competition, Otter Tail Power Co. v. United States, 410 U.S. 366, 381 (1973), 

“[c]ourts are not authorized in civil proceedings to punish antitrust violators.” United States v. E. 

I. du Pont de Nemours & Co., 366 U.S. 316, 326 (1961). For the same reasons, antitrust 

 

6

 Internal Apple documents that recently became public describe how, in an effort to “[r]educe 

Apple’s net royalty to Qualcomm,” Apple planned to “[h]urt Qualcomm financially” and “[p]ut 

Qualcomm’s licensing model at risk,” including by filing lawsuits raising claims similar to the 

FTC’s claims in this case. Reed Albergotti, Apple Said Qualcomm’s Tech Was No Good. But in 

Private Communications, It Was ‘the Best.’, Wash. Post, Apr. 19, 2019, 

https://www.washingtonpost.com/technology/2019/04/19/apple-said-qualcomms-tech-was-nogood-private-communications-it-was-best. One commentator has observed that these documents 

“potentially reveal[] that Apple was engaging in a bad faith argument both in front of antitrust 

enforcers as well as the legal courts about the actual value and nature of Qualcomm’s patented 

innovation.” Id.

Case 5:17-cv-00220-LHK Document 1487 Filed 05/02/19 Page 5 of 7
6 

1

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

STATEMENT OF INTEREST OF THE UNITED STATES

Case No. 5:17-cv-00220-LHK

remedies do not properly redress consumer harms that stem from factors other than a loss of 

competition. 

Nevertheless, because antitrust relief is equitable in nature, a court must take into account 

various public and private concerns beyond competition when crafting a remedy. In United 

States v. E. I. du Pont de Nemours & Co., the Supreme Court explained that a court in fashioning 

an antitrust remedy must be guided by “three dominant influences”: (1) “[t]he duty of giving 

complete and efficacious effect to the prohibitions of the statute;” (2) “the accomplishing of this 

result with as little injury as possible to the interest of the general public;” and (3) “a proper 

regard for the vast interests of private property.” 366 U.S. at 327–28. Accordingly, although a 

court typically may not balance other public policies against antitrust law’s express goal of 

protecting competition, the remedial measures it imposes to fully restore competition must do as 

little harm as possible to various public and private interests. See also Hartford-Empire Co. v. 

United States, 323 U.S. 386, 409 (1945), supplemented, 324 U.S. 570 (1945) (in government suit 

for injunction, “we may not impose penalties in the guise of preventing future violations”).

Because an overly broad remedy could result in reduced innovation, with the potential to 

harm American consumers, this Court should hold a hearing and order additional briefing to 

determine a proper remedy that protects competition while working minimal harm to public and 

private interests.

IV. CONCLUSION

For the foregoing reasons, the United States respectfully submits that, if this Court finds 

liability on the FTC’s claims, it should hold a hearing and request additional briefing, so that it 

carefully may consider how to fashion a proper antitrust remedy that fully restores any 

Case 5:17-cv-00220-LHK Document 1487 Filed 05/02/19 Page 6 of 7
7 

1

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

STATEMENT OF INTEREST OF THE UNITED STATES

Case No. 5:17-cv-00220-LHK

competition as a result of the challenged practices, without causing harm to competition, 

innovation, and consumers.

DATED: May 2, 2019 Respectfully submitted,

ANDREW C. FINCH

Principal Deputy Assistant Attorney General 

DAVID L. ANDERSON

United States Attorney 

MICHAEL F. MURRAY

Deputy Assistant Attorney General

WILLIAM J. RINNER

Chief of Staff and Senior Counsel 

DANIEL E. HAAR

Acting Chief, Competition Policy & 

Advocacy Section

U.S. Department of Justice 

Antitrust Division

/s/ Andrew C. Finch 

ANDREW C. FINCH

Case 5:17-cv-00220-LHK Document 1487 Filed 05/02/19 Page 7 of 7