Federal Trade Commission v. Qualcomm Inc., 411 F. Supp. 3d 658 (N.D. Cal. 2019), rev’d, 969 F.3d 974 (9th Cir. 2020), is the most consequential government monopolization case since Microsoft. Little commentary on the case discerns and engages, at the level of proof rather than theory, the basis for Judge Lucy Koh’s findings of fact and conclusions of law. My approach is qualitatively different. I conduct in 774 pages a de novo review of the publicly available trial record in FTC v. Qualcomm. I have done so in part to demonstrate to any jurist interested in the question that the task is entirely possible to accomplish, and in part to show why due process of law requires it. My analysis reveals Judge Koh’s errors of fact concerning monopoly, innovation, and due process — as well as her errors of law, many but not all of which the Ninth Circuit identified.On May 21, 2019, Judge Koh issued her findings of fact and conclusions of law in the FTC’s monopolization case against Qualcomm. She found that Qualcomm had violated both section 1 and section 2 of the Sherman Act by engaging in a series of interrelated practices between 2006 and 2016 that collectively harmed competition in what she defined as two relevant antitrust markets for different versions of modems used in smartphones and other mobile devices.Judge Koh ordered Qualcomm to submit to a permanent, worldwide injunction that would require, among other things, that the company renegotiate its patent-license agreements (which number in the hundreds and span several decades) and offer exhaustive licenses to its portfolio of cellular standard-essential patents (SEPs) to rival modem manufacturers (rather than solely to original equipment manufacturers (OEMs)). She also prohibited Qualcomm from limiting the sale of its modems only to OEMs that have first taken a license to Qualcomm’s cellular SEPs. Yet, even if one assumes for sake of argument (but contrary to fact) that the FTC’s theories of liability were well founded, Judge Koh’s findings of fact and conclusions of law did not support her imposition of a permanent, worldwide injunction. In broad terms, three substantive errors invalidated her findings of fact and conclusions of law. First, Judge Koh’s exercise of discretion over fact finding in the bench trial in FTC v. Qualcomm denied Qualcomm due process of law. Judge Koh seemed to adopt, without attribution, the opinions of the FTC’s expert economic witness, Professor Carl Shapiro. By presenting answers to complex economic questions as being based solely on her own (undefined) analysis (rather than having been influenced in any way by the voluminous expert testimony of Professor Shapiro), Judge Koh avoided having to analyze any of Professor Shapiro’s testimony. Most significantly, Judge Koh avoided the duty to reconcile her conclusions with the testimony of Professor Shapiro that materially tended to exculpate Qualcomm because his testimony was shown on cross examination to expose the implausibility of the FTC’s theory of competitive harm. Consequently, Judge Koh also impaired the ability of the Ninth Circuit and the Supreme Court to examine complex questions of economic fact addressed in Professor Shapiro’s testimony. In violation of Rule 52(a)(1) of the Federal Rules of Civil Procedure, she failed to make specific findings of fact—in particular, findings concerning the plausibility or implausibility of Professor Shapiro’s theoretical bargaining model, which appeared to resemble the model upon which he had predicated testimony that the D.C. Circuit previously had found unreliable in United States v. AT&T. Finally, Judge Koh gave no weight to the testimony of many of Qualcomm’s witnesses (including all of its expert economic witnesses), yet her reasons for doing so were unpersuasive and at times contradicted by substantial evidence in the record.Second, Judge Koh’s findings of fact had virtually no support in the evidence that she identified. She chose to place heavy weight on documentary evidence from the past and discount trial testimony (particularly when Qualcomm witnesses testified). Yet, the recurring problem with Judge Koh’s analysis of documentary evidence was her failure to comprehend, and then explain in her findings of fact and conclusions of law, the proper context for interpreting that documentary evidence. From her specious analysis of key pieces of evidence, Judge Koh inferred anticompetitive intent, disparaged Qualcomm witnesses, and made legally erroneous findings concerning patent exhaustion, among other issues. Judge Koh’s conclusion that Qualcomm’s licensing practices had harmed the competitive process was not a proven fact; it was, instead, strictly her a priori conjecture that violated established economic principles used by courts in antitrust cases to analyze markets and competition. Judge Koh never analyzed actual empirical evidence about competition in what she defined as the two relevant product markets for modems. Publicly available evidence contradicted her conclusion that Qualcomm’s conduct had harmed competition in those product markets. Third, Judge Koh misapplied or ignored controlling Supreme Court precedent. She found Qualcomm’s practices unlawful because they reduced rivals’ margins, even though the Supreme Court held in linkLine that a firm has no duty to price its products so as to preserve its rivals’ profit margins. Judge Koh ignored the Supreme Court’s call for caution in condemning low prices when she concluded that the reduction in the price of modems that Qualcomm offered to Apple in exchange for (alleged) exclusivity was anticompetitive. And she implausibly turned Aspen Skiing from an ugly duckling into a swan. What was by the Supreme Court’s own description a narrow exception to the rule that even a monopolist may decline to deal with its smaller competitors was transformed by Judge Koh into an expansive rule of compulsory licensing available to every corporate giant, including Apple, the largest seller of smartphones in the United States. The FTC disavowed her findings of fact and conclusions of law regarding Aspen Skiing during oral argument in Qualcomm’s appeal to the Ninth Circuit
