Following news of the FTC launching an anti-trust complaint against global telco Qualcomm, Apple has joined the party with its own suit, accusing Qualcomm of charging ‘excessive royalties’ and withholding payments in retaliation for Apple cooperating with South Korean regulators that are investigating the chip supplier.
According to the lawsuit filed on January 20th, Qualcomm, which provides crucial chips used in the iPhone, charges Apple an unfair amount to license its cellular patents. Apple is also seeking nearly $1 billion in rebate payments which it claims have been wrongfully withheld.
‘To protect this business scheme, Qualcomm has taken increasingly radical steps, most recently withholding nearly $1B in payments from Apple as retaliation for responding truthfully to law enforcement agencies investigating them’ Apple said in a statement about the lawsuit to CNNTech.
‘For many years Qualcomm has unfairly insisted on charging royalties for technologies they have nothing to do with’ Apple said in a statement to The Register. ‘Qualcomm built its business on older, legacy standards but reinforces its dominance through exclusionary tactics and excessive royalties. Despite being just one of over a dozen companies that contributed to basic cellular standards, Qualcomm insists on charging Apple at least five times more in payments than all the other cellular patent licensors we have agreements with combined.’
In a response, Qualcomm’s Don Rosenberg, executive vice president and general counsel, said ‘While we are still in the process of reviewing the complaint in detail, it is quite clear that Apple’s claims are baseless. Apple has intentionally mischaracterized our agreements and negotiations, as well as the enormity and value of the technology we have invented, contributed and shared with all mobile device makers through our licensing program. Apple has been actively encouraging regulatory attacks on Qualcomm’s business in various jurisdictions around the world, as reflected in the recent KFTC decision and FTC complaint, by misrepresenting facts and withholding information. We welcome the opportunity to have these meritless claims heard in court where we will be entitled to full discovery of Apple’s practices and a robust examination of the merits.’
Qualcomm was fined $850m in South Korea last month for forcing phone manufacturers into unfair patent licensing agreements in order to get its modem chips.
In later news, on 26th January it emerged that Apple was also taking Qualcomm to court in China, again seeking damages for abuse of its market position. This time the claim was for £115m, and was accompanied by claims that Qualcomm had broken the terms of an agreement over how Apple could use its technology.
Don Rosenberg for Qualcomm commented ‘These filings by Apple's Chinese subsidiary are just part of Apple's efforts to find ways to pay less for Qualcomm's technology… Qualcomm is prepared to defend its business model anywhere in the world.’