Apple Suing Qualcomm for $1 Billion After FTC’s Modem Complaint

BY Evan Selleck

Published 20 Jan 2017

Apple Australia

Just a couple of days ago, Qualcomm found itself in the hot seat from the Federal Trade Commission, and now once again the company is back in the headlines.

CNBC reports that Apple has taken the necessary to steps to sue chip supplier Qualcomm over a variety of different patent royalties, to the tune of $1 billion. The report states that Apple has decided to sue Qualcomm because the chip supplier owes the company upwards of $1 billion, because Qualcomm retaliated over Apple providing information to law enforcement that was investigating Qualcomm:

“Apple is suing Qualcomm for roughly $1 billion, saying Qualcomm has been “charging royalties for technologies they have nothing to do with.” […] Apple says that Qualcomm has taken “radical steps,” including “withholding nearly $1 billion in payments from Apple as retaliation for responding truthfully to law enforcement agencies investigating them.”

The lawsuit against Qualcomm follows a public complaint levied against it by the FTC, which said that Qualcomm has used its global presence, and its position as a major supplier of companies across the globe, for “onerous and anticompetitive supply and licensing terms on cell phone manufacturers.”

Apple has relied on Qualcomm’s modems in the iPhone and iPad lineup up until the iPhone 7, where Apple switched, at least in part, to the Intel brand for its modems.

Apple supplied a statement regarding the lawsuit against Qualcomm:

“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.”

An interesting turn of events, to say the least.

[via CNBC]