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QUALCOMM’S OPPOSITION TO FTC’S MOTION TO EXCLUDE 

Case No. 17-cv-0220-LHK-NMC

CRAVATH, SWAINE & MOORE LLP 

Gary A. Bornstein (pro hac vice) 

gbornstein@cravath.com 

Yonatan Even (pro hac vice) 

yeven@cravath.com 

825 Eighth Avenue 

New York, New York 10019-7475 

Telephone: (212) 474-1000 

Facsimile: (212) 474-3700 

KEKER, VAN NEST & PETERS LLP 

Robert A. Van Nest, SBN 84065 

rvannest@keker.com 

633 Battery Street 

San Francisco, CA 94111-1809 

Telephone: (415) 676-2289 

Facsimile: (415) 397-7188 

MORGAN, LEWIS & BOCKIUS LLP 

Richard S. Taffet (pro hac vice) 

richard.taffet@morganlewis.com 

101 Park Avenue 

New York, NY 10178-0060 

Telephone: (212) 309-6000 

Facsimile: (212) 309-6001 

Attorneys for Defendant 

QUALCOMM INCORPORATED 

Additional counsel in the signature block. 

UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

SAN JOSE DIVISION 

FEDERAL TRADE COMMISSION 

Plaintiff, 

v. 

QUALCOMM INCORPORATED, a 

Delaware corporation, 

Defendant. 

Case No. 5:17-CV-00220-LHK-NMC 

DEFENDANT QUALCOMM 

INCORPORATED’S OPPOSITION TO 

FEDERAL TRADE COMMISSION’S 

MOTION TO EXCLUDE EXPERT 

TESTIMONY OF DR. EDWARD A. 

SNYDER 

Courtroom: 8, 4th Floor 

Judge: Hon. Lucy H. Koh 

Date: October 18, 2018 

Case 5:17-cv-00220-LHK Document 874 Filed 09/25/18 Page 1 of 29
i 

TABLE OF CONTENTS 

Page 

TABLE OF AUTHORITIES .......................................................................................................... ii 

I. INTRODUCTION ...............................................................................................................1 

II. FACTS .................................................................................................................................4 

A. Prof. Snyder Is an Expert in Industrial Organization Economics ............................4 

B. Prof. Snyder’s Analysis of the Plaintiff’s Hypothesis and Conclusions ..................6 

III. LEGAL STANDARD ..........................................................................................................9 

IV. ARGUMENT .....................................................................................................................10 

A. Prof. Snyder’s Analysis of Factors That Drive Industry Outcomes Easily 

Satisfies Daubert. ...................................................................................................10 

B. Prof. Snyder’s Expert Analysis of Industry Performance Satisfies Daubert. ........22 

V. CONCLUSION ..................................................................................................................24 

Case 5:17-cv-00220-LHK Document 874 Filed 09/25/18 Page 2 of 29
ii 

TABLE OF AUTHORITIES 

Page(s) 

Cases 

Allied Orthopedic Appliances Inc. v. Tyco Health Care Grp. LP, 592 F.3d 991 

(9th Cir. 2010) ..........................................................................................................................18 

Aloe Vera of Am. Inc. v. United States, No. CV-99-01794-PHX-JAT, 2014 WL 

3072981 (D. Ariz. July 7, 2014) ..............................................................................................15 

Apple, Inc. v. Samsung Elecs. Co., No. 12-CV-00630-LHK, 2014 WL 794328 

(N.D. Cal. Feb. 25, 2014).........................................................................................................14 

BladeRoom Grp. Ltd. v. Facebook, Inc., No. 5:15-CV-01370-EJD, 2018 WL 

1611835 (N.D. Cal. Apr. 3, 2018) .............................................................................................9 

City of Pomona v. SQM N. Am. Corp., 750 F.3d 1036 (9th Cir. 2014) ...........................................9 

Clausen v. M/V New Carissa, 156 F. Supp. 2d 1192 (D. Or. 2001) ..............................................12 

FTC v. BurnLounge, Inc., 753 F.3d 878 (9th Cir. 2014) ...............................................................10 

In re TFT-LCD (Flat Panel) Antitrust Litig., Nos. M 07-1827 SI, C 10-1064 SI, 

2013 WL 124347 (N.D. Cal. Jan. 8, 2013) ..............................................................................15 

Kumho Tire Co. v. Carmichael, 526 U.S. 137 (1999) ...................................................................17 

Murray v. S. Route Maritime SA, 870 F.3d 915 ...............................................................................9 

Ohio v. American Express Co., 138 S. Ct. 2274 (2018) ................................................................24 

Primiano v. Cook, 598 F.3d 558 (9th Cir. 2010) .............................................................................9 

Pyramid Techs., Inc. v. Hartford Cas. Ins. Co., 752 F.3d 807 (9th Cir. 2014) .........................9, 10 

Rambus Inc. v. FTC, 522 F.3d 456 (D.C. Cir. 2008) ...............................................................18, 19 

Rent-A-Car, Inc. Avis Budget, Inc., 738 F.3d 960, 969 (9th Cir. 2013) ..........................................9 

Standard Oil Co. v. United States, 221 U.S. 1 (1911) ...................................................................23 

United Food & Commercial Workers Local 1776 vs. Teikoku Pharma USA, 296 

F. Supp. 3d 1187 (N.D. Cal. 2017) ..........................................................................................12

United States v. Microsoft Corp., 253 F.3d 34 (D.C. Cir. 2001) (en banc) .............................18, 23 

Case 5:17-cv-00220-LHK Document 874 Filed 09/25/18 Page 3 of 29
iii 

Statutes & Rules 

Fed. R. Evid. 702 .......................................................................................................................9, 16 

FTC Act Section 5, 15 USC §45 ....................................................................................................18 

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QUALCOMM'S OPPOSITION TO FTC’S MOTION TO EXCLUDE 

Case No. 17-cv-0220-LHK-NMC

I. INTRODUCTION 

To prevail in this case, the FTC bears the burden of proving that Qualcomm’s 

conduct caused harm to competition or the competitive process. To try and meet that burden, the 

FTC has proffered the opinions of Prof. Carl Shapiro, an economist. Prof. Shapiro opined that 

Qualcomm’s conduct could harm competition (FTC’s Motion to Exclude Expert Testimony of 

Prof. Edward Snyder, ECF No. 788, hereinafter “Mot.”, at 13) by discouraging investment and 

encouraging exit from the modem chip business. (Id.) But in his report, Prof. Shapiro undertook 

no analysis at all to try and assess whether Qualcomm’s conduct actually did harm competition 

or to what extent, and in his deposition he confirmed that he did not attempt to quantify the effect 

of Qualcomm’s conduct on any measure of performance (such as investment, sales, revenues or 

profits) industry-wide or by any of Qualcomm’s rival chip suppliers. Instead, Prof. Shapiro 

simply posited that certain industry outcomes—most specifically exit by rivals and relatively 

high concentration in the alleged markets for modem chips—are consistent with his theory. 

As one response to Prof. Shapiro’s opinions, Qualcomm submitted the report of 

Prof. Edward Snyder, the Dean of the Yale School of Management and a leading expert in 

industrial organization economics, which is the field of economics that focuses on the study of 

market structure and strategic behavior of firms, with a focus on imperfect competition—and 

thus a particular affinity to the field of antitrust. Prof. Snyder used well-accepted methodology 

to perform an in-depth qualitative study of the cellular industry and, in particular, the modem 

chip business. Based on this study and applying fundamental industrial organization economics 

principles, Prof. Snyder provided two core opinions that are highly relevant to the Court’s task in 

this case, as they rebut Prof. Shapiro’s opinions regarding the alleged effects caused by 

Qualcomm’s conduct. First, having studied the industry, Prof. Snyder opined that the industry 

outcomes identified by Prof. Shapiro—such as exit and relatively high concentration—are 

consistent with the general characteristics of the modem chip business, meaning that benign 

industry factors could (and likely did) cause the outcomes observed by Prof. Shapiro. This 

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opinion directly undermines Prof. Shapiro’s opinion that the outcomes he observed were 

necessarily—or even likely—caused by Qualcomm’s conduct. Second, Prof. Snyder opines that 

the modem chip industry does not bear any of the hallmarks of an industry laboring under 

restrictions on the competitive process, such as stagnant growth and diminished innovation. This 

opinion also undermines Prof. Shapiro’s speculation about the harm to the industry caused by 

Qualcomm’s conduct, which Prof. Shapiro posits was durable and pervasive, affecting the 

alleged markets for over a decade. 

These two opinions are highly relevant, and go to the heart of a core premise of 

the FTC’s antitrust claim. They were constructed on the basis of a detailed study of the industry 

using the fundamental tools long recognized and used by industrial organization economists to 

analyze the functioning and performance of markets and of the firms that operate within them. 

Yet the FTC nonetheless asks the court to exclude those two opinions, attacking Prof. Snyder’s 

methodology; the relevance and reliability of his conclusions; and his lack of specific experience 

in the modem chip industry. These criticisms are predicated on a misapprehension or 

misrepresentation of Prof. Snyder’s opinions and of the work and expertise of industrial 

organization economists. The FTC’s motion should be denied for each of the following reasons.

First, Prof. Snyder’s testimony regarding the factors responsible for failure or 

success in the modem chip industry is the result of generally accepted and reliable theories and 

methodologies regularly applied by industrial organization economists. Prof. Snyder 

“conduct[ed] an in-depth analysis of the modem chip industry” (Milici Decl. Ex. 1., ECF No. 

788-1, hereinafter “Rpt.”, ¶ 39) to identify “[f]rom the modem chip supplier’s perspective, the 

factors that affect the ability to be successful” (Rpt. ¶ 143). He then tested the explanatory 

power of those factors by reviewing whether they can explain the successes and failures of 14 

current and former modem chip suppliers. That methodology is a reliable application of 

accepted principles of industrial organization economics. 

Second, Prof. Snyder’s testimony regarding the factors responsible for outcomes 

in the modem chip industry will be helpful to the Court, is relevant, and is reliable. That 

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Case No. 17-cv-0220-LHK-NMC 

testimony is relevant because, as noted above, it directly undermines the FTC’s assertion that 

industry outcomes, such as the exit of certain suppliers, must have been caused by Qualcomm’s 

challenged conduct, rather than other competitive factors; in other words, it shows that the same 

developments would likely also have occurred in the industry in a “but-for” world without the 

challenged conduct. 

The FTC’s criticism that Prof. Snyder has not ruled out completely the possibility 

that Qualcomm’s practices also may have contributed in some way to industry developments 

completely misses the point. It is the FTC that relies on certain outcomes as supposed evidence 

of anticompetitive effects; Prof. Snyder’s opinions, which show alternative causes for the same 

outcomes, refute the probative value of that evidence and the FTC’s theory of causation. 

The FTC’s complaint that Prof. Snyder did not quantify the effect of any 

particular factor on observable outcomes is likewise misguided. While Qualcomm did offer 

quantitative rebuttal to Prof. Shapiro through other experts, the criticism fails as to Prof. Snyder 

because his opinions are more than sufficiently reliable to rebut Prof. Shapiro’s opinions, all of 

which are qualitative and “directional”, rather than quantitative. Indeed, it is notable that the 

FTC is attacking the reliability of Prof. Snyder’s study as not sufficiently reliable even though 

Prof. Shapiro, on behalf of the FTC, seeks to explain the same industry outcomes without

performing any study of the industry or of those outcomes, whether quantitative or qualitative – 

let alone any study as thorough and comprehensive as the one performed by Prof. Snyder. 

Finally, the FTC’s criticism that Prof. Snyder is not an expert on the cellular 

industry is a red herring; IO economists routinely study industries about which they know little 

to begin with, specifically to assess their structure and performance – topics on which industrial 

organization economists often provide testimony in antitrust cases dealing with a variety of 

industries. 

Third, Prof. Snyder’s opinion that “[s]tandard indicators of industry performance” 

(Rpt. ¶ 33) contradict the FTC’s claim of anticompetitive effect is highly probative of whether 

Qualcomm’s conduct has reduced competition. If the FTC were correct that Qualcomm’s 

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Case No. 17-cv-0220-LHK-NMC 

purported monopolistic conduct has inhibited competition and driven rival modem chip suppliers 

out of the alleged markets for well over a decade, industrial organization economists might 

expect to see signs of impaired competition, such as stagnating innovation, high prices, slow 

adoption of new technology and low benefits to consumers. Indeed, as noted above, these effects 

are what Prof. Shapiro suggests are the natural consequence of his theory of liability. But Prof. 

Snyder’s testimony will show that the modem chip industry does not exhibit any of these 

characteristics undermines Prof. Shapiro’s contention that the industry is suffering from the 

effects of anticompetitive conduct. The FTC again faults Prof. Snyder for not conclusively 

ruling out the possibility that industry performance could have been even stronger without 

Qualcomm’s challenged practices, but this again either misses the point or seeks improperly to 

shift the FTC’s burden of proof. In any event, this criticism is certainly not proper grounds for 

exclusion of expert testimony; there can be no doubt that Prof. Snyder applies widely accepted 

IO economics tools to examine the industry’s performance, and the FTC can argue that the 

industry could have succeeded more, if it is so inclined, after the Court has heard from Prof. 

Snyder on this issue. 

II. FACTS 

A. Prof. Snyder Is an Expert in Industrial Organization Economics 

The FTC does not challenge Prof. Snyder’s extensive qualifications as an expert 

in economics and industrial organization, the field of economics that deals most directly with 

pricing and distribution of products, interactions among competitors, contracting practices and 

competition issues. (See Mot. 2.) “Industrial organization is concerned with the structure of 

industries in the economy and the behavior of firms and individuals in these industries. The field 

has historically focused on how markets depart from idealized conditions of perfect competition, 

whether because of scale economies, transaction costs, strategic behavior, or other factors. From 

an empirical perspective, this leads to questions about how competition plays out in different 

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markets and how it relates to industry structure”.1 Industrial organization economics is widely 

recognized as the economic field closest to the core inquiries of antitrust law and is frequently 

brought to bear in antitrust cases.2 Industrial organization techniques and principles have been 

used to explain outcomes in a wide variety of industries, including shipbuilding, airlines, 

computers, oil and credit cards.3 Prof. Snyder himself has assessed key economic factors and 

 1

 Byars Decl. Ex. Q, Jonathan Levin and Liran Einav, “Empirical Industrial Organization: A 

Progress Report,” Journal of Economic Perspectives, Vol. 24, No. 2, 146 Spring 2010. See also 

Byars Decl. Ex. E, F.M. Scherer and David Ross, Industrial Structure and Economic 

Performance, Boston: Houghton Mifflin, p. 1 (“[Industrial organization economics is] concerned 

with how productive activities are brought into harmony with the demand for goods and services 

through some organizing mechanism such as a free market, and how various and imperfections 

in the organizing mechanism affect the success achieved in satisfying and economy’s wants”.) 

2

 Byars Decl. Ex. S, Julian O. Von Kalinowski, 4 Antitrust Counseling and Litigation 

Techniques § 36.03 (Matthew Bender, Rev. Ed. 2018) (“Industrial organization is the field of 

economics closest in subject matter to the field of antitrust law. Industrial organization 

economists apply microeconomic theory to study how firms and markets are organized and 

behave. As an applied field of study, industrial organization economics combines economic 

theory with empirical analysis of actual markets, both historical and statistical.”); see also Byars 

Decl. Ex. P, Jonathan B. Baker & Timothy F. Bresnahan, Economic Evidence in Antitrust: 

Defining Markets and Measuring Market Power, in Handbook of Antitrust Economics 1, 2 

(2008) (“Just as antitrust has become infused with economics, industrial organization 

economics— the economics field most closely related to antitrust—has turned its attention to the 

legal system. Over the past few decades many of the issues and problems addressed in the 

research literature on industrial organization economists have been suggested or framed by 

antitrust cases.”) 

3

 Byars Decl. Ex. N, David S. Evans & Richard Schmalensee, Paying with Plastic: The 

Digital Revolution in Buying and Borrowing, at xii (2005) (“First, we examine the evolution of 

this industry through the lens of economics. We are particularly interested in explaining how 

economic forces have combined with institutional and technological ones to shape this industry, 

and in showing how competition works in an industry that does not fit neatly into any of the 

standard models used by economists.”); Byars Decl. Ex. E, F. M. Scherer & David Ross, 

Industrial Structure and Economic Performance 94 (1990); Byars Decl. Ex. J, Timothy F. 

Bresnahan & Shane Greenstein, Technological Competition and the Structure of the Computer 

Industry, 47 J. Indus. Econ. 1 (1999); Byars Decl. Ex. I, Gerald Cook, A Review of History, 

Structure, and Competition in the U.S. Airline Industry, 7 J. Aviation/Aerospace Educ. & Res. 33 

(1996); Byars Decl. Ex. F, Scott E. Masten, James W. Meehan & Edward A. Snyder, The Costs 

of Organization, 7 J.L., Econ. & Org. 1 (1991). 

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QUALCOMM'S OPPOSITION TO FTC’S MOTION TO EXCLUDE 

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derived the implication of those factors on competition in a number of cases involving different 

industries. (Milici Decl. Ex. 1, Snyder Appendix B.) 

Prof. Snyder is Dean of the Yale School of Management and William S. Beinecke 

Professor of Economics and Management. He is the former Dean of the University of Chicago 

Booth School of Business and George Shultz Professor of Economics and former Dean of the 

University of the Virginia Darden School of Business and Charles C. Abbot Professor Business 

Administration. Prior to his tenures at Yale, Chicago, and Virginia, Prof. Snyder was the Chair 

of Business Economics and Public Policy of the University of Michigan Ross School of 

Business. Earlier in his professional career, Prof. Snyder served as Staff Economist to the 

National Commission to Review Antitrust Laws and Procedures in the Antitrust Division of the 

U.S. Department of Justice. (Milici Decl. Ex. 1, Snyder Appendix A.) 

In addition to his academic and professional credentials, Prof. Snyder has 

authored numerous articles in the fields of economics and industrial organization, including three 

articles on antitrust policy and enforcement written in collaboration with Thomas E. Kauper, 

Professor of Law Emeritus at the University of Michigan Law School and former Assistant 

Attorney General of the Antitrust Division, U.S. Department of Justice. He has provided expert 

testimony in numerous antitrust cases involving a variety of industries, including high-tech 

industries such as optical disk drives, cathode ray tubes and liquid crystal displays. He has 

conducted academic research on a wide array of topics, including pricing practices, distribution 

of products, vertical integration and contracting, and industrial organization in general. (Milici 

Decl. Ex. 1, Snyder Appendix A.) 

B. Prof. Snyder’s Analysis of the Plaintiff’s Hypothesis and Conclusions 

In his June 28, 2018 report, Prof. Snyder applied his expertise to assess the FTC’s 

claim that Qualcomm’s alleged conduct “deterred or precluded entry, suppressed innovation, and 

forced many of Qualcomm’s competitors to exit the business of supplying” CDMA and LTE 

modem chips. (Rpt., ¶ 7-8, Compl. ¶ 136, ECF no. 1.) Prof. Snyder engaged in a detailed study, 

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relying on standard tools and assessments that are used by industrial organization economists in 

the ordinary course to assess the structure of markets and the conduct of the firms operating in 

them. To evaluate the FTC’s claim, Prof. Snyder first considered two hypotheses that might 

explain the industry outcomes on which the FTC relies to claim anticompetitive effect: 

 The “Plaintiff’s Hypothesis”, which is that “Qualcomm’s exclusionary conduct 

(i.e., as relevant here, tying of modem chips with patent licenses, refusal to 

provide exhaustive component-level patent licenses to modem chip suppliers, and 

discount agreements with Apple) reduced competition in the modem chip 

industry, altered industry dynamics, and allowed Qualcomm to become more 

successful than it otherwise would have been.” (Rpt. ¶ 21.) 

 The “Industry Factors Hypothesis”, which posits that “relevant industry factors, 

identified by an analysis of the modem chip industry and grounded in relevant 

industrial organization principles . . . explain the structure of the industry at any 

point in time, the relative success and failure of modem chip suppliers, industry 

changes, and observed entry and exit decisions.” (Rpt. ¶ 20.) 

To identify the industry factors to be used in his Industry Factors Hypothesis, 

Prof. Snyder applied principles of industrial organization economics to examine numerous 

industry characteristics that may affect the conduct of firms in the modem chip industry, 

including economies of scale, economies of scope, learning effects, vertical integration, 

transaction costs, asset specificity and product lifecycles, to analyze the competitive dynamics in 

the industry. (Rpt. ¶¶ 48, 180.) His analysis yields insights regarding how industry factors 

influence the overall structure of the industry and determine the success or failures of individual 

firms. Thus, Prof. Snyder “identif[ies] particularly relevant industry factors and indicate[s] their 

overall implications on the organization of firms in the modem chip industry”. (Rpt. ¶ 46.) For 

example, he opines that “[t]he combination of (a) substantial up-front costs associated with the 

development and design of modem chips and the required physical capital costs, and (b) low 

marginal costs of production results in substantial economies of scale for suppliers”; that modem 

chip suppliers benefit from economies of scope because “suppliers who produce multiple 

different modem chips can achieve efficiency in their R&D by transferring successful R&D 

investments in the development of one particular chip to other models”; and that “learning in 

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production, whereby costs decline with cumulative output, and product-cycle effects, whereby 

price-cost margins on innovative products start out high but decline over time, exert downward 

pressures on prices”. (Rpt. ¶ 47.) Prof. Snyder also assesses industry-specific factors such as 

“successive shifts from one generation of wireless standards to the next”, which “entail 

increasingly large investments in R&D as well as product design, the returns on which are highly 

variable and depend in large part on the supplier’s strategic foresight and efficiency in R&D”. 

(Rpt. ¶ 48.) This analysis, “grounded in relevant industrial organization principles, allowed 

[Prof. Snyder] to identify the industry factors that potentially drive the economic activity in the 

industry.” (Rpt. ¶ 22.) In particular, he concludes that “industry analysis indicates that 

independent of the nature of their contractual relationships, modem chip suppliers succeed or fail 

based on their foresight, efficient investments and ability to execute”. (Rpt. ¶ 31(f).) 

After identifying these three factors as affecting firm performance in this industry, 

Prof. Snyder analyzed the experience and performance of 14 modem chip suppliers with a 

particular focus on “adverse outcomes such as exit and loss of customers, and on successful 

outcomes such as new entry into the industry and successful product development”, to determine 

whether these factors alone could explain these outcomes. (Rpt. ¶ 22.) Prof. Snyder’s analysis 

not only confirmed the centrality of the industry factors he had identified, but also led him to 

conclude that “every major success or failure experienced by modem chip suppliers can be fully 

explained by these industry factors”. (Rpt. ¶ 31(f).) 

Prof. Snyder next considered “[s]tandard indicators of industry performance” to 

assess the FTC’s claims that Qualcomm had been impairing competition in the industry for many 

years. (Rpt. ¶ 33.) As he explained, the FTC claims that “alleged exclusionary conduct has 

inhibited competition and driven modem chip suppliers out of the industry, which [he] would 

expect to lead to poor performance in the modem chip industry overall”. (Rpt. ¶ 475.) Again 

applying his IO expertise, Prof. Snyder opined that “[k]ey measures of performance include the 

pace of innovation, quality-adjusted prices, and overall benefits to consumers”. (Rpt. ¶ 476.) 

Based on industry data, Prof. Snyder analyzed each of these metrics and concluded that “the 

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industry has exhibited impressive performance on each dimension”. (Rpt. ¶ 476.) He opines that 

“[t]his performance is evidence against the implication of Plaintiff’s Hypothesis that 

Qualcomm’s alleged exclusionary conduct has impaired industry performance”. (Rpt. ¶ 497.) 

III. LEGAL STANDARD 

“Fed. R. Evid. 702 provides that expert opinion evidence is admissible if: (1) the 

witness is sufficiently qualified as an expert by knowledge, skill, experience, training, or 

education; (2) the scientific, technical, or other specialized knowledge will help the trier of fact 

to understand the evidence or to determine a fact in issue; (3) the testimony is based on sufficient 

facts or data; (4) the testimony is the product of reliable principles and methods; and (5) the 

expert has reliably applied the relevant principles and methods to the facts of the case.” City of 

Pomona v. SQM N. Am. Corp., 750 F.3d 1036, 1040 (9th Cir. 2014) (citing Fed. R. Evid. 702). 

Under Daubert and its progeny, a district court’s inquiry into admissibility of 

expert opinion evidence is flexible. See Pyramid Techs., Inc. v. Hartford Cas. Ins. Co., 752 F.3d 

807, 810 (9th Cir. 2014). “A judge is not tasked with deciding whether the expert is right or 

wrong” but instead “[t]he judge is supposed to screen the jury from unreliable nonsense 

opinions, but not to exclude opinions merely because they are impeachable.” Id. (quoting Alaska 

Rent-A-Car, Inc. Avis Budget, Inc., 738 F.3d 960, 969 (9th Cir. 2013.) “Expert opinion 

testimony is relevant if the knowledge underlying it has a valid connection to the pertinent 

inquiry.” Pyramid Techs., 752 F.3d at 810 (quoting Primiano v. Cook, 598 F.3d 558, 565 (9th 

Cir. 2010). Expert testimony is reliable if the knowledge underlying it has a reliable basis in the 

knowledge and experience of the relevant discipline. Id. Any “challenges that go to the weight 

of the evidence are within the province of the fact finder” and cannot be considered with regards 

to admissibility. Ponoma, 750 F.3d at 1044.

For a jury trial, “the trial judge acts as a gatekeeper by examining the full picture 

of the experts’ methodology and preventing shoddy expert testimony and junk science from 

reaching the jury”. BladeRoom Grp. Ltd. v. Facebook, Inc., No. 5:15-CV-01370-EJD, 2018 WL 

1611835, at *1 (N.D. Cal. Apr. 3, 2018) (quoting Murray v. S. Route Maritime SA, 870 F.3d 915, 

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923 ((9th Cir. 2017)). Where, as here, the court is both the gatekeeper and the fact finder, “there 

is less danger that a trial court will be ‘unduly impressed by the expert’s testimony or opinion’”, 

FTC v. BurnLounge, Inc., 753 F.3d 878, 888 (9th Cir. 2014). Simply put, “[t]he district court is 

not tasked with deciding whether the expert is right or wrong, just whether his testimony has 

substance such that it would be helpful”. Pyramid Techs., 752 F.3d at 813 (quoting Alaska RentA-Car, 969-70.) 

IV. ARGUMENT 

Prof. Snyder should be permitted to provide the challenged opinions at trial, so as 

to rebut Prof. Shapiro’s speculative assertion that Qualcomm’s conduct could have harmed 

competition by some indeterminate and unquantified measure. First, Prof. Snyder’s 

methodology is sound and well accepted. Second, Prof. Snyder’s testimony regarding the factors 

responsible for outcomes in the modem chip industry will be helpful to the Court, is relevant, and 

is reliable. Third, Prof. Snyder’s opinion that “[s]tandard indicators of industry performance” 

contradict the FTC’s claim of anticompetitive effect is highly probative of whether Qualcomm’s 

conduct has reduced competition. (Rpt. ¶ 33.) 

A. Prof. Snyder’s Analysis of Factors That Drive Industry Outcomes Easily 

Satisfies Daubert. 

1. Prof. Snyder’s Methodology for Identifying and Analyzing Industry 

Factors is Reliable and Widely Accepted in the Field of Industrial 

Organization Economics 

Prof. Snyder’s assessment of factors that drive outcomes in the modem chip 

industry is grounded in widely accepted principles and methodologies that are frequently used by 

industrial organization economists. Prof. Snyder applied his expertise in industrial organization 

economics to analyze the modem chip industry. (See Rpt. V.) In doing so, he did exactly what 

industrial organization economists do as a matter of course—conducting an in-depth analysis of 

an industry to identify the factors that affect the success or failure of firms within it. (See infra 

notes 4-7.) To perform this analysis, Prof. Snyder proceeded from a broad set of factors 

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generally recognized in the industrial organization literature to a narrowed set of impact or 

explanatory factors in the specific industry at hand—here, identified as “(a) foresight, (b) 

efficient investment in technologies and (c) execution of strategies”. Prof. Snyder’s 

methodology for analyzing industry structure and characteristics to identify the main factors that 

affect industry outcomes is supported by academic literature.4 Prof. Snyder’s ultimate 

identification of foresight5, investment efficiency6 and execution7 as key factors explaining firm 

 4 See, e.g., Byars Decl. Ex. E, Scherer, F.M. and David Ross, Industrial Structure and 

Economic Performance, Boston: Houghton Mifflin, 1990, pp. 1-7. 

5

 Byars Decl. Ex. K, Carl Shapiro & Hal R. Varian, Information Rules 177 (1999) (“The 

biggest winners in the information economy . . . are companies that have launched technologies 

that have been propelled forward by positive feedback. This requires patience and foresight, not 

to mention a healthy dose of luck.”); Byars Decl. Ex. G, Gary Hamel & C.K. Prahalad, 

Competing for the Future, 74 Harv. Bus. Rev., July-Aug. 1994, at 128 (“Industry foresight is 

based on deep insights into trends in technology, demographics, regulations, and lifestyles, 

which can be harnessed to rewrite industry rules and create new competitive space. . . . Given 

that change is inevitable, the real issue for managers is whether that change will happen 

belatedly, in a crisis atmosphere, or with foresight, in a calm and considered manner; whether the 

transformation agenda will be set by a company’s more prescient competitors or by its own point 

of view; whether transformation will be spasmodic and brutal or continuous and peaceful. . . .”). 

6

 Byars Decl. Ex. R, Unni Pillai, A Model of Technological Progress in the Microprocessor 

Industry, 61 J. Indus. Econ. 877, 877 (2013) (identifying a relationship between “technological 

progress in the microprocessor industry” and the “repeated adoption of higher quality vintages of 

capital equipment produced by the upstream semiconductor equipment industry”); Byars Decl. 

Ex. H, Sharon Oster, Modern Competitive Analysis 289 (2d ed. 1994) (“A considerable amount 

of growth is generated by firms in the high-technology area. Indeed some have argued that 

developing and fostering innovation remains our nation’s prime area of comparative 

advantage . . . . In the cellular phone and microprocessor markets, for example, R&D can 

amount to 25-30 percent of firm sales.”); Byars Decl. Ex. N, David S. Evans & Richard 

Schmalensee, Some Economic Aspects of Antitrust Analysis in Dynamically Competitive 

Industries, in 2 Innovation Policy and the Economy 1, 1, 3 (Adam B. Jaffe et al., eds. 2002) 

(“[F]irms engage in dynamic competition for the market—usually through research-anddevelopment (R&D) . . . . The defining feature of new-economy industries is a competitive 

process dominated by efforts to create intellectual property through R&D, which often results in 

rapid and disruptive technological change.” (emphasis in original)). 

7

 Byars Decl. Ex. O, Chad W. Autry and Stanley E. Griffis, Supply Chain Capital: The 

Impact of Structural and Relational Linkages on Firm Execution and Innovation, Journal of 

Business Logistics, Vol. 29, No. 1, 2008 (“Execution-oriented performance is defined as the 

extent to which a firm’s core processes operate efficiently and effectively to fulfill customer 

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performance—in this case, in the modem chip industry—is likewise supported by the academic 

literature. Because Prof. Snyder applies widely accepted and reliable industrial organization 

principles as well as a methodology accepted among industrial organization economists, his 

testimony is reliable and therefore admissible. 

The FTC nonetheless proffers three attacks on Prof. Snyder’s opinions, claiming 

that (1) Prof. Snyder’s “theory has not been subjected to peer review and publication” and is “not 

accepted by the relevant scientific community”; (2) Prof. Snyder did not subject the industry 

factors to quantitative tests or analyses; and (3) Prof. Snyder did not employ a testable 

methodology. (Mot. 7-8, 10-12.) All these attacks are without merit, and seem particularly 

misplaced given the goal of Prof. Snyder’s report—to rebut Prof. Shapiro’s opinions about cause 

and effect, which are themselves not grounded in any analysis, not tested and not quantified. 

First, the FTC argues that the Court should exclude Prof. Snyder’s report because 

his method of analysis has not been subjected to peer review or publication and is not accepted 

by the relevant scientific community. (Mot. 6). That is simply not the case—nor is it the law. 

As a threshold matter, peer review is not a necessary component of reliability. See United Food 

& Commercial Workers Local 1776 vs. Teikoku Pharma USA, 296 F. Supp. 3d 1142, 1187 (N.D. 

Cal. 2017) (admitting expert testimony where the expert “could point to no other case where an 

expert has employed the exact model he employs here” because the methodology was 

“consistent with accepted economic theory and well-established principles”); see also Clausen v. 

M/V New Carissa, 156 F. Supp. 2d 1192, 1197 (D. Or. 2001). But in any case, as noted above, 

supra notes 4-7, extensive literature has reported the use of Prof. Snyder’s basic methodology—

analyzing the industry to identify factors explaining success and failure—as well as the specific 

factors he has identified. (See also Snyder Dep Tr. 90:1-10 (noting that the industrial 

 

demands.” (emphasis in original)); Byars Decl. Ex. D, Gary W. Dickson, “An analysis of vendor 

selection systems and decisions,” Journal of Purchasing, Vol. 2, No. 1, 1966 (finding that, among 

23 factors considered among 170 different purchasing managers, quality, delivery and 

performance history were the three most important criteria for firm successes). 

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organization literature “would reflect the importance of these factors”).) This methodology has 

general applicability across industries, and has in fact been applied in a broad and diverse array 

of industries, demonstrating both its acceptance and reliability. (See supra note 5.) 

The FTC’s criticism that Prof. Snyder could not define foresight, investment 

efficiency or execution is without merit. Prof. Snyder provides clear definitions and 

characteristics for each factor, as well as numerous concrete examples of how individual firms’ 

successes or failures were influenced by each factor. Prof. Snyder defines foresight or 

“alignment with demand” as the ability “or good fortune, to have invested in technologies and 

standards that are demanded by network carriers and OEMs”. (Rpt. ¶ 143.) 

 (Rpt. ¶ 409). Prof. Snyder explains investment 

efficiency as “the need to invest efficiently in R&D to overcome the technical challenges in 

inherent in designing modem chips”. (Id.) 

 (Rpt. ¶ 409.) Finally, Prof. Snyder defines 

efficiency or execution as “the ability to design and deliver modem chips that OEMs prefer over 

competitors’ chips, whether because of their innovativeness, cost-effectiveness, or features”. 

(Id). An example of the importance of the execution factor was 

 (Rpt. ¶ 388.) And as noted above, these factors have been 

previously identified by countless others in the field and are therefore widely understood. (See

supra notes 4-7). 

Despite all this, the FTC argues that the academic literature has not discussed the 

explanatory power of the three factors identified by Prof. Snyder in the specific context of the 

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modem chip industry. That is neither a requirement under the law nor a valid criticism of Prof. 

Snyder’s methodology. Daubert does not limit expert testimony to analyses that have already 

been performed in full outside of the litigation; indeed, if that were the standard, none of the 

economic experts in the case (or, for that matter, in almost any case) could provide opinions to 

the Court. Just because the question may not have been studied before does not mean that an 

accepted methodology of general applicability is somehow inadequate or incapable of providing 

probative conclusions. Indeed, the application of valid, well-accepted methodologies to new 

problems is the very essence of helpful expert testimony. See Apple, Inc. v. Samsung Elecs. Co., 

No. 12-CV-00630-LHK, 2014 WL 794328, at *15 (N.D. Cal. Feb. 25, 2014) (“Daubert and its 

progeny explicitly contemplate the admission of expert opinions in new fields, as long as such 

opinions are rooted in a methodology generally accepted in the scientific field at issue.” (citing 

Daubert, 509 U.S. at 594)). Here, Prof. Snyder applied accepted principles of industrial 

organization economics to identify the factors that explain outcomes in the modem chip industry. 

Those economic principles are well documented in the literature, as are the industry factors he 

identified. (See supra notes 4-7). His conclusion that those factors have explanatory power in 

this specific industry may not appear in prior publications, but Daubert does not require that an 

expert’s conclusions already have been reached by other experts. Prof. Snyder’s methodology is 

sound, and the FTC gives no reason to believe that fundamental industrial organization 

principles—applied in a variety of industries to assess firm success and failures—would not 

apply to the modem chip industry. 

Second, the FTC faults Prof. Snyder for not “applying a formula or weighting 

system to analyze” the industry factors or providing “metrics” or otherwise “quantifying the 

effect of the industry factors”. (Mot. 7-8.) The FTC similarly faults Prof. Snyder for not 

conducting “any statistical tests” or advancing “a theoretical model” to explain “how observed 

marketplace outcomes fit the model”. (Mot. 11.) This is a strawman argument. While 

Qualcomm, through other experts, has also offered a quantitative analysis rebutting Prof. 

Shapiro’s opinions, a qualitative opinion of the sort provided by Prof. Snyder is clearly sufficient 

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innovation, product differentiation, and distribution channels for LCD products (report Dkt. No. 

1178)). Here, Prof. Snyder applied fundamental principles of industrial organization economics 

to identify key factors that influence industry conduct and outcomes. Prof. Snyder then 

performed a thorough and probing assessment of the successes and failures of 14 modem chip 

suppliers to assess whether those factors explained the industry outcomes. Prof. Snyder’s 

methodology is more than sufficient under Daubert, and the Court should reject the FTC’s 

attempt to graft a quantitative requirement onto Fed. R. Evid. 702. 

Third, the FTC’s related claim that Prof. Snyder applied no “testable” or “tested” 

methodology of assessing foresight, investment efficiency, and execution is likewise misplaced. 

(Mot. 8-9.) This theory again seems to demand something akin to a quantification of each factor, 

but as noted above, such quantification is not needed under Daubert—or for the purposes of Prof. 

Snyder’s opinions here. Prof. Snyder does not rank individual modem chip suppliers on a scale 

on the basis of their foresight, investment efficiency or execution, so his methodology does not 

require him to “test” which suppliers perform a little better or a little worse on each of these 

factors. Instead, based on his “analysis of the types of economic activity that occur in the 

industry” (Rpt. ¶ 22), Prof. Snyder identified these three factors as the key drivers of outcomes in 

the modem chip industry (Rpt. ¶ 143). He then tested the explanatory power of these industry 

factors by analyzing observed outcomes for 14 modem chip suppliers over the course of many 

years. In that sense, Prof. Snyder’s assessment of those factors against observable industry 

outcomes is thus entirely “testable” (and, indeed, “tested”), and is well tailored to rebut the 

qualitative assessments of Prof. Shapiro concerning the causes of the same observed outcomes. 

To the extent the FTC believes that Prof. Snyder ignored evidence relevant to these factors, the 

FTC is free to cross-examine Prof. Snyder on his conclusions, and thereby “test” them. 

In the same vein, the FTC claims that Prof. Snyder’s “technique of assessing 

execution” is “untested” and “untestable” because it has “no known error rate”. (Mot. 9.) This is 

another strawman argument that strays from the Daubert standard. As Prof. Snyder explained, 

“if you were to task 100 economists to assess execution in the modem chip industry”, he would 

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expect the “economists . . . to recognize that execution’s important and identify the instances 

where firms succeeded and when they did not, because that’s objective” and that “it has 

explanatory power”.9 (Byars Decl. Ex. B, 165:22-166:25.) Further, Prof. Snyder testified that in 

considering execution, he identified the “particular set of expectations [that] have been made and 

set of expectations that [modem chip suppliers] have taken on” and observed whether suppliers 

met those expectations. (Byars Decl. Ex. B, 164:16-165:1.) In other words, Prof. Snyder 

identified specific instances where firms executed or failed to execute on specific milestones, 

targets or goals and assessed the explanatory power of such instances of execution on chip 

suppliers’ successes or failures. That methodology is testable, repeatable and thus reliable. 

The FTC similarly misrepresents Prof. Snyder’s deposition testimony regarding 

foresight and investment efficiency. (Mot. 10.) As to foresight, the FTC faults Dr. Snyder for 

“not analyz[ing] every strategic decision that each firm made” and focusing only on “big 

differences” among firm’s investment efficiency. (Mot. 9.) But Dr. Snyder focused on the most 

impactful manifestations of the factors he examined, such as strategic decisions “that had the 

most influence on whether [modem chip suppliers] were able to sell particular phones to 

particular customers”—which, he testified, is empirical and “observable”. (Byars Decl. Ex. B, 

102:25-103:6.) The FTC points to no authority holding that Daubert requires Prof. Snyder to 

fully analyze every minute investment decision and every marginal change in investment 

efficiency for each and every modem chip supplier. To the extent the FTC believes that Dr. 

Snyder ignored relevant decisions or other meaningful information, that is a subject for crossexamination, not a Daubert motion. 

 9

 An error rate is not necessarily required under Daubert. See Kumho Tire Co. v. 

Carmichael, 526 U.S. 137, 141-42 (1999) (“[T[he test of reliability is ‘flexible’, and Daubert’s 

list of specific factors neither necessarily not exclusively applies to all experts or in every 

case.”). Nor would it be sensible to demand an “error rate” for a qualitative assessment of the 

type applied by industrial organization economists such as Prof. Snyder in these circumstances. 

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2. Prof. Snyder’s Analyses of Modem Chip Suppliers are Reliable, Relevant 

and Helpful 

The FTC’s argument that Prof. Snyder did not analyze whether Qualcomm’s 

conduct affected its rivals’ performance (Mot. § B) is legally and factually incorrect. The FTC 

misstates the showing required to prove its claims, and conflates its own burden of proof with the 

reliability of an expert’s methodology under Daubert. 

The FTC alleges that Qualcomm violated Section 5 of the FTC Act, 15 USC §45, 

through conduct violative of Sections 1 and 2 of the Sherman Act. To prove a violation of either 

Section 1 or Section 2 of the Sherman Act, the FTC is required to show causation: that the 

conduct at issue caused harm to competition. “[I]n a case under Section 1 of the Sherman Act” 

challenging allegedly exclusionary agreements, “the plaintiff must prove that the exclusive 

dealing arrangement actually foreclosed competition” in a “substantial share of the line of 

commerce affected”. Allied Orthopedic Appliances Inc. v. Tyco Health Care Grp. LP, 592 F.3d 

991, 996 & n.1 (9th Cir. 2010) (citations omitted)). Likewise, under Section 2 of the Sherman 

Act, “to be condemned as exclusionary, a monopolist’s act must have ‘anticompetitive effect.’ 

That is, it must harm the competitive process . . .” Rambus Inc. v. FTC, 522 F.3d 456, 463 (D.C. 

Cir. 2008) (quoting United States v. Microsoft Corp., 253 F.3d 34, 58 (D.C. Cir. 2001) (en 

banc)). The FTC, as the plaintiff, “bears the burden of proving the anticompetitive effect of the 

monopolist’s conduct”. Id. 

The FTC’s motion substantially understates its burden, and that infects its faulty 

analysis of Prof. Snyder’s methodology. By the FTC’s reasoning, its economist, Prof. Shapiro, 

satisfies the FTC’s burden by showing the “likely competitive effects” of Qualcomm’s conduct 

and concluding that Qualcomm’s conduct “could harm competition”. (Mot. at 13 (emphasis 

added).) But the FTC then faults Prof. Snyder for analyzing the converse scenario—whether the 

outcomes alleged by the FTC to show anticompetitive effects could have occurred in the absence 

of Qualcomm’s conduct. 

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That puts the burden on the wrong party. As Prof. Shapiro acknowledged, “[a]ny 

retrospective evaluation of the economic effects of a challenged business practice necessarily 

requires” analyzing whether “the market outcome . . . would have arisen in the absence of the 

challenged conduct”. (Shapiro Rebuttal Rpt. ¶ 399.) That is the burden for the FTC and 

Professor Shapiro to meet. It is their burden to isolate observable outcomes such as firm exit or 

reduced investment from the “consequence of a superior product, business acumen, or historical 

accident”. Rambus, 522 F.3d at 463. Prof. Snyder’s analysis of Qualcomm’s modem chip 

competitors demonstrates all the reasons why the industry outcomes that the FTC and 

Professor Shapiro claim are tied to Qualcomm’s conduct could, and likely would, have occurred 

even in the absence of that conduct. Prof. Snyder’s opinions are therefore powerful rebuttal 

evidence severing the causal link between Qualcomm’s conduct and outcomes like firm entry 

and exit; put another way, they show the absence of causation of the alleged anticompetitive 

harm, which the FTC must prove. 

The FTC also argues that Prof. Snyder’s opinions regarding the primary industry 

factors—foresight, investment and execution—are “not helpful to the Court if those firm-level 

factors are themselves influenced by Qualcomm’s conduct”. (Mot. 14.) As a threshold matter, 

this argument ignores Prof. Snyder’s testimony that there is “endogeneity of the firm factors”; 

meaning that he “identified the industry factors that [he] believed would not be influenced by the 

conduct”. (Byars Decl. Ex. B, Tr. 43:9-11.) But more fundamentally, the FTC’s objection again 

seeks to reverse the burden of proof. It is not Prof. Snyder’s burden to prove a negative—i.e., 

that Qualcomm’s conduct had no effect on its rivals’ performance—or to isolate Qualcomm’s 

challenged conduct from the effects of Qualcomm’s superior product, business acumen or 

historical accident. Rather, Prof. Snyder’s analysis of Qualcomm’s rivals shows all the ways in 

which Prof. Shapiro failed to meet the FTC’s burden of establishing causation between the 

challenged conduct and the industry outcomes he says that conduct caused. The logical 

implication of the FTC’s argument is that to be admissible, Prof. Snyder’s opinion would need to 

definitively rule out any possibility that the FTC’s allegations are correct. Daubert does not 

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impose such a requirement. Rather, Prof. Snyder’s testimony serves the important function of 

identifying major flaws in Prof. Shapiro’s analysis. 

The FTC’s specific example of one of Prof. Snyder’s factors illustrates its error. 

The FTC claims, for example, that Prof. Snyder’s opinion that “Firm A’s failure to invest 

efficiently led to its exit” is methodologically unsound “if Qualcomm’s conduct diminished Firm 

A’s ability to invest efficiently”. (Mot. 14) 

 (E.g., Snyder Rpt. ¶ 270.) Prof. Snyder demonstrates that Professor Shapiro’s

conclusion that Qualcomm hurt its rivals’ ability to invest, which he reaches without controlling 

for Intel’s inefficiency, is unsound. As Prof. Snyder testified, it is “important to not just 

associate anticompetitive harms as alleged to the conduct”, but to “pursue whether there are 

alternative explanations” for “those outcomes”. (Byars Decl. Ex. B, Tr. 54:12-17.) 

Thus, there is simply no basis to exclude Prof. Snyder’s opinions, which go 

directly to exposing the deficiencies in Prof. Shapiro’s analysis. Indeed, accepting the FTC’s 

argument would protect Prof. Shapiro from the very criticisms the FTC levels against 

Prof. Snyder. Professor Shapiro admits that he “cannot say definitively which of those firms 

would not have exited if not for Qualcomm’s conduct” (Byars Decl. Ex. C, 56:21-23); that 

establishing a definitive causal link has “not really been the focus” of his analysis (id. 57:6-7); 

that he cannot identify any case (other than Intel’s allegedly delayed entry by one year due to 

Qualcomm’s agreements with Apple) for which he “can attribute the lack of entry to 

Qualcomm’s challenged conduct” (id. 58:8-18); has not “come up with a measure of the ‘but for’ 

market share . . . or higher margins” in the counterfactual world (id. 59:22-24) or even 

“quantified the effects of Qualcomm’s conduct on handset prices” (id. Tr. 61:6-7) except to the 

extent that “output effects would . . . tend to be very small, because the demand is so inelastic for 

the modem chips” (id. 61:18-21). Prof. Snyder’s detailed analysis of modem chip firms and the 

alternative explanations for their success and failure go to the heart of what the FTC and 

Professor Shapiro fail to establish. 

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3. Prof. Snyder Brings His Economic Expertise to Bear and Does Not Simply 

Provide a Narrative. 

The FTC also contends that Prof. Snyder “lacks the relevant qualifications to 

assess modem chip supplier performance and instead summarizes factual evidence without 

providing any additional expert insight”. (Mot. 10.) This argument simply ignores 

Prof. Snyder’s explanation of his analysis and his opinions. The FTC here begins from the 

premise that “Prof. Snyder does not attempt to use the evidentiary record to assess an issue in 

which economists have expertise” (Mot. 10), but that premise is wrong. As set forth above, 

Prof. Snyder began by analyzing “the types of economic activity that occur in the [modem chip] 

industry”. (Rpt. ¶ 22 (emphasis added).) Using accepted principles of industrial organization 

economics, he identified three recognized factors that appeared to drive outcomes in the industry. 

He then reviewed the record evidence to assess the successes and failures of 14 industry 

participants and to test the explanatory power of the three factors he had identified on their 

performance. Each of those steps required his expertise as an economist. That is economic 

analysis based on Prof. Snyder’s “expert insight.” Indeed, the FTC itself states that it would be 

proper expert testimony for Prof. Snyder to have assessed whether “a recognized model of firm 

behavior is consistent with observed marketplace outcomes”. (Mot. 10.) That is very similar to 

what he actually did, which was to apply the well accepted theoretical principles of industrial 

organization economics to identify the main factors that an industrial organization economist 

would expect to affect outcomes in the relevant industry, and then assess whether the industry 

factors he identified can explain actual “observed marketplace outcomes”. 

For the same reason, the FTC’s assertion that Prof. Snyder “is not an expert in 

cellular technology or the modem chip industry” (Mot. 10) is beside the point. Prof. Snyder is 

unquestionably an expert in industrial organization economics, and industrial organization 

economists routinely study and analyze the structure and performance of industries using 

fundamental industrial organization principles. And the FTC is wrong to say that Prof. Snyder 

“offers no opinion beyond the facts he summarizes”. (Mot. 11.) His descriptions of modem chip 

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suppliers’ successes and failures serve his ultimate opinion that those successes and failures can 

be explained by a set of factors that an industrial organization economist would expect to drive 

outcomes in light of the particular characteristics of the modem chip industry. That opinion is 

firmly grounded in Prof. Snyder’s considerable economic expertise and a well-accepted 

methodology. 

B. Prof. Snyder’s Expert Analysis of Industry Performance Satisfies Daubert. 

To test the FTC’s claim that Qualcomm’s conduct “excluded competitors, 

increased consumer prices, and suppressed innovation”, Prof. Snyder also examined the long-run 

performance of the modem chip and mobile devices industries to determine whether there is 

evidence of impaired performance. Analyzing “standard indicators such as price and quality”, 

including industry-wide metrics of research and development spend, data speed improvements, 

mobile chip price trends and consumer surplus (Rpt. ¶ 22), Prof. Snyder concluded that “not only 

is there not an obvious impairment to competition, I think anybody would look at this and say 

it’s excellent performance.” (Byars Decl. Ex. B, 18:20-19:23.) Because Prof. Snyder’s analysis 

undermines one the FTC’s key claims in this case—that Qualcomm’s conduct harmed 

competition—it is relevant and helpful. 

The FTC nevertheless contends again that Prof. Snyder’s opinion should be 

excluded because of his supposed failure prove a negative—i.e., that the industry would not have 

performed even better without the challenged conduct. Besides again seeking inappropriately to 

shift the burden of proof, this argument misstates the significance of Prof. Snyder’s testimony 

and the requirements under Daubert. Prof. Snyder’s analysis of long-run market performance 

provides evidence of a dynamic market that does not exhibit the characteristics that an industrial 

organization expert would expect to see in a market suffering from a decade-long, market-wide 

scheme of monopolization of the sort the FTC alleges Qualcomm has perpetuated. Prof. 

Snyder’s opinion therefore is highly probative and will assist the Court in assessing whether the 

alleged conduct has in fact stifled competition. Prof. Snyder’s supposed failure to disprove 

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completely the possibility that the industry could have been even more successful is certainly not 

disqualifying; it is the FTC’s burden to show that such further success would indeed have 

occurred in the but-for world. The FTC’s expert, Prof. Shapiro, could have attempted to show 

just that (but did not). In any event, Prof. Snyder’s opinion that the industry has performed 

phenomenally well—far better than one would have expected if the FTC’s allegations were 

correct is probative, relevant, and easily meets the Daubert threshold. 

For that reason, Prof. Snyder’s acknowledgment that there’s “a possibility that 

industry performance without Qualcomm’s conduct could have been yet more superior” is not 

significant, let alone disqualifying. As Prof. Snyder testified, “that’s . . . for [Prof. Shapiro] to 

answer, or Plaintiff to make that argument”. (Byars Decl. Ex. B, 72:25-73:19.) A simple 

example exposes the flaw in the FTC’s position. A pharmaceutical company faced with a 

product liability suit may wish to present evidence that its drug did not cause damage to the 

plaintiff’s red blood cells, as the lawsuit claims. The company may hire an expert to examine the 

plaintiff’s red blood cells. If the company’s expert prepared a report opining that the plaintiff’s 

red blood cell count is within the norm and therefore does not exhibit the kind of injuries alleged 

to be associated with the drug in question, that report would be probative in assessing the 

plaintiff’s claim that the drug caused him injury. The plaintiff could not obtain exclusion of the 

report by arguing that the company’s expert failed to rule out the possibility that his red blood 

cell count would have been even higher if he had not taken the drug. That is an argument the 

plaintiff may raise during cross-examination of the expert at trial. 

The FTC nonetheless argues that there can be injury to competition in dynamic 

and growing industries. (Mot 15 n. 11 (discussing Prof. Shapiro’s interpretation of Standard Oil 

Co. v. United States, 221 U.S. 1 (1911) and United States v. Microsoft Corp., 254 F.3d 34 (D.C. 

Cir. 2001).) That may be a ground on which the FTC may choose to cross-examine 

Prof. Snyder, but it is not a basis for exclusion. Prof. Snyder opines, based on his training, “if 

Plaintiff’s Hypothesis were correct, analysis of the modem chip industry should reveal clear 

indications of impaired performance in terms of the ability of the industry to efficiently deliver 

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value to consumers” (Rpt. ¶ 28) along measures such as “the pace of innovation, qualityadjusted prices, and overall benefits to consumers” (Rpt ¶ 476), and that therefore, in assessing 

the presence of anticompetitive effects, it is highly probative for a court to consider whether an 

industry is vibrant, innovative and expanding. See Ohio v. American Express Co., 138 S. Ct. 

2274, 2289 (2018) (finding that plaintiffs failed to prove that defendant’s business practices 

“stifled competition” because the industry “experienced expanding output and improved 

quality”). The FTC’s argument also fails to grapple with Prof. Snyder’s testimony that, based on 

his analysis of long-run performance, “not only is there not an obvious impairment to 

competition, I think anybody would look at this and say it’s excellent performance”. (Byars 

Decl. Ex. B, 18:20-19:23; see also Rpt. ¶ 497 (“industry has performed incredibly well, 

delivering huge improvements in modem chips at the same time as prices continued to 

decline”).) That assessment undermines the FTC’s claim that industry performance has been 

crippled by monopolistic conduct. It is therefore relevant, helpful, and admissible. The FTC’s 

motion to exclude it should be denied. 

V. CONCLUSION 

For the reasons stated above, the Court should deny the FTC’s motion (ECF no. 

798 ) to exclude Prof. Snyder’s expert testimony. 

Dated: September 24, 2018 Respectfully submitted, 

/s/Gary A. Bornstein

Gary A. Bornstein 

Yonatan Even 

CRAVATH, SWAINE & MOORE LLP 

Worldwide Plaza 

825 Eighth Avenue 

New York, NY 10019-7475 

Tel: (212) 474-1000 

Fax: (212) 474-3700 

gbornstein@cravath.com 

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yeven@cravath.com 

Robert A. Van Nest 

Eugene M. Paige 

Justina K. Sessions 

KEKER, VAN NEST & PETERS LLP 

633 Battery Street 

San Francisco, CA 94111-1809 

Tel: (415) 676-2289 

Fax: (415) 397-7188 

rvannest@keker.com 

epaige@keker.com 

jsessions@keker.com 

Richard S. Taffet 

MORGAN, LEWIS & BOCKIUS LLP 

101 Park Avenue 

New York, NY 10178-0060 

Tel: (212) 309-6000 

Fax: (212) 309-6001 

richard.taffet@morganlewis.com 

Willard K. Tom 

MORGAN, LEWIS & BOCKIUS LLP 

1111 Pennsylvania Ave. NW 

Washington, DC 20004-2541 

Tel: (202) 739-3000 

Fax: (202) 739 3001 

willard.tom@morganlewis.com 

Geoffrey T. Holtz 

MORGAN, LEWIS & BOCKIUS LLP 

One Market, Spear Street Tower 

San Francisco, CA 94105-1126 

Tel: (415) 442-1000 

Fax: (415) 442-1001 

geoffrey.holtz@morganlewis.com 

Attorneys for Qualcomm Incorporated

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