Earlier this week the FTC filed a lawsuit against Qualcomm in which they alleged that the company had “forced” Apple to use their chips in exchange for lowering licensing fees, which is along the lines of monopolistic behavior and clearly a big no-no in the eyes of the FTC. Unfortunately Qualcomm’s legal woes don’t end there as Apple has since filed a lawsuit themselves.
According to the lawsuit, it seems that when Apple cooperated with the Korea Fair Trade Commission, Qualcomm decided to “punish” the Cupertino company by withholding payments to Apple, that is unless Apple was willing to change its statement to the KFTC, or at least that’s what Apple is alleging in its lawsuit.
The company goes on to note that Qualcomm had been overcharging the company in the billions for patent royalties that Apple claims are “for technologies they have nothing to do with.” Qualcomm has yet to respond to Apple’s allegations but it does seem like the company is facing quite a bit of legal trouble.
In 2016 they were hit with a $854 million fine in South Korea, and the year before that they landed themselves in trouble with China’s antitrust regulators who slapped them with a $954 million fine. Combine this with the FTC and Apple’s lawsuit, it seems that Qualcomm has quite a deep legal hole that they’ll have to dig themselves out of. In the meantime Apple’s full statement on the lawsuit reads:
For many years Qualcomm has unfairly insisted on charging royalties for technologies they have nothing to do with. The more Apple innovates with unique features such as TouchID, advanced displays, and cameras, to name just a few, the more money Qualcomm collects for no reason and the more expensive it becomes for Apple to fund these innovations. 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 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.
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 believes deeply in innovation and we have always been willing to pay fair and reasonable rates for patents we use. We are extremely disappointed in the way Qualcomm is conducting its business with us and unfortunately after years of disagreement over what constitutes a fair and reasonable royalty we have no choice left but to turn to the courts.