In 2005, Apple contacted Qualcomm as a potential supplier for modem chips in the first iPhone. Qualcomm’s response was unusual: a letter demanding that Apple sign a patent licensing agreement before Qualcomm would even consider supplying chips.

“I’d spent 20 years in the industry, I had never seen a letter like this,” said Tony Blevins, Apple’s vice president of procurement.

Most suppliers are eager to talk to new customers—especially customers as big and prestigious as Apple. But Qualcomm wasn’t like other suppliers; it enjoyed a dominant position in the market for cellular chips. That gave Qualcomm a lot of leverage, and the company wasn’t afraid to use it.

Blevins’ comments came when he testified earlier this year in the Federal Trade Commission’s blockbuster antitrust case against Qualcomm. The FTC filed this lawsuit in 2017 partly at the urging of Apple, which had chafed under Qualcomm’s wireless chip dominance for a decade.

Last week, a California federal judge provided the FTC and Apple with sweet vindication. In a scathing 233-page opinion [PDF], Judge Lucy Koh ruled that Qualcomm’s aggressive licensing tactics had violated American antitrust law.

I read every word of Judge Koh’s book-length opinion, which portrays Qualcomm as a ruthless monopolist. The legal document outlines a nearly 20-year history of overcharging smartphone makers for cellular chips. Qualcomm structured its contracts with smartphone makers in ways that made it almost impossible for other chipmakers to challenge Qualcomm’s dominance. Customers who didn’t go along with Qualcomm’s one-sided terms were threatened with an abrupt and crippling loss of access to modem chips.

“Qualcomm has monopoly power over certain cell phone chips, and they use that monopoly power to charge people too much money,” says Charles Duan, a patent expert at the free-market R Street Institute. “Instead of just charging more for the chips themselves, they required people to buy a patent license and overcharged for the patent license.”

Now, all of that dominance might be coming to an end. In her ruling, Koh ordered Qualcomm to stop threatening customers with chip cutoffs. Qualcomm must now re-negotiate all of its agreements with customers and license its patents to competitors on reasonable terms. And if Koh’s ruling survives the appeals process, it could produce a truly competitive market for wireless chips for the first time in this century.

Qualcomm’s perfect profit machine

Different cellular networks operate on different wireless networking standards, and these standards change every few years. For much of the last 20 years, Qualcomm has enjoyed a lead—and in some cases a stranglehold—on chips that support major cellular standards. So if a smartphone company aspired to sell its wares around the world, it had little choice but to do business with Qualcomm.

For example, in the early 2010s Qualcomm enjoyed a big lead on chips for the CDMA standards favored by Verizon and Sprint in the US and some other carriers overseas. Qualcomm Chief Technology Officer James Thomps