Qualcomm's stock is tumbling before the opening bell after a federal judge ruled that the company unlawfully stifled cellphone chip market competition and charged excessive licensing fees.
U.S. District Judge Lucy Koh in San Jose, California found Tuesday that Qualcomm violated antitrust law, charging high royalties and squeezing out rivals, according to Wall Street Journal report.
Koh ordered Qualcomm to negotiate or renegotiate licensing deals with customers. The company must also license its patents to rival chip makers at fair prices and can't sign exclusive supply agreements with smartphone makers like Apple that block competitors from access to that market.
Qualcomm Inc. must submit to monitoring for the next seven years to make sure it follows the order.
Shares are down 12% in premarket trading Wednesday.