San Francisco: Apple on Friday sued Qualcomm, accusing the California chipmaker of abusing its market power to demand unfair royalties, echoing charges filed days earlier by US antitrust regulators. Apple said in the court filing that it has been overcharged “billions of dollars” by its chipmaking partner’s “illegal scheme.”
Apple also claimed Qualcomm owes it a billion dollars but is refusing to pay in retaliation for the iPhone maker’s cooperating with South Korean antitrust regulators looking into the chip maker’s actions in that country. “For many years Qualcomm has unfairly insisted on charging royalties for technologies they have nothing to do with,” Apple said in an email statement.
“To protect this business scheme Qualcomm has taken increasingly radical steps, most recently withholding nearly $1 billion in payments from Apple as retaliation for responding truthfully to law enforcement agencies investigating them.” The suit charges Qualcomm of building a business model on using its rights to older, legacy technology considered telecommunication industry standards to jack up royalties when Apple innovates with features such as TouchID fingerprint recognition or digital wallets in mobile devices.
“Despite being just one of over a dozen companies who 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,” Apple said.
Apple noted in the suit that Qualcomm’s business practices have come under scrutiny by antitrust regulators in an array of countries for selling its smartphone chipsets only to makers agreeing to its “preferred license terms” for essential mobile telecom patents.
Apple asked for a jury trial, and for damages including Qualcomm paying the company what it owes plus giving up excessive royalties it has raked in. Qualcomm did not immediately respond to an AFP request for comment. The Apple filing came three days after the US Federal Trade Commission filed suit in federal court in California claiming Qualcomm abused its market power in as part of its “unlawful maintenance of a monopoly in baseband processors,” which are devices that enable cellular communications in phones and other products.
Qualcomm rejected the agency’s case as “significantly flawed,” arguing that reasoning at the heart of the civil complaint is wrong.