Just weeks after Qualcomm secured a clear victory in its long-running legal battle with Apple, sending the chipmaker's shares rocketing higher, a federal judge in San Jose ruled against the company in a high-profile anti-trust lawsuit that could seriously disrupt Qualcomm's business model.
The decision sent Qualcomm shares plunging as much as 11% in premarket trade, erasing half of its gains from the Apple settlement.
The decision sided with the FTC, which initially sued Qualcomm back in January 2017. Released late Tuesday, the decision, handed down by US District Judge Lucy Koh, found Qualcomm violated anti-trust laws by charging unreasonably high royalties for its patents. Koh challenged the company's practice of collecting chip royalties based on a smartphone's price, according to WSJ.
The judge ruled that Qualcomm's licensing practices had "strangled competition" in "key parts" of the chip market.
President Trump's decision to add Huawei to a US 'blacklist' hammered chip stocks earlier in the week. More bad news was the last thing Qualcomm investors needed.