iPhone maker Apple filed a $1 billion lawsuit against chip maker Qualcomm accusing the company for overcharging. Qualcomm has also been sued by Apple for refusing to pay $1 billion in promised rebates. It comes days after US Federal Commission sued the chip maker for using anti-competitive tactics to maintain its monopoly in the supply of key semiconductor.
Apple and Samsung are the major customers of Qualcomm’s modem chips used to connect smartphones to wireless networks. They jointly account for almost 40 percent of the Qualcomm’s revenue.
The lawsuit has been filed in US District Court of Califronia according to which the company accused Qualcomm for engaging in anti-competitive “no license, no chips” policy. The chip maker forced Apple to pay separate licensing fee for the same chips.
Here’s what FTC stated “Qualcomm precluded Apple from sourcing baseband processors from Qualcomm’s competitors from 2011 to 2016. Qualcomm recognized that any competitor that won Apple’s business would become stronger, and used exclusivity to prevent Apple from working with and improving the effectiveness of Qualcomm’s competitors.”
However, Qualcomm’s General counsel, Den Rosenberg called the lawsuit “baseless.” Here’ what he said- “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.”
“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,” he added.
To recall, KFTC (Korea Fair Trade Commission) fined $854 million for misusing its market strength and forcing smartphone makers to pay unnecessary royalties for patents licensing as part of sales of its modem chips.