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January 23, 2017

Apple, Qualcomm head to court in billion-dollar lawsuit

The lawsuit alleges that Qualcomm refused to pay $1bn in discounts.

By CBR Staff Writer

Technology giant Apple has filed a lawsuit against chip-maker Qualcomm, accusing it of charging exorbitant prices on the components it supplies.

In the lawsuit filed in US District Court for the Southern District of California, the smartphone maker also claims that Qualcomm refused to pay $1bn in discounts, promised as part of the supply contracts.

According to the lawsuit, Qualcomm held back rebates as Apple was in discussions with South Korea’s antitrust regulator, the Korea Fair Trade Commission (KFTC).

Apple said in its lawsuit: “Qualcomm has withheld the required contractual payments
from Apple even though the agreement clearly permits Apple to respond to the KFTC’s lawful investigation and requests for information.

qualcomm, apple lawsuit

“If that were not enough, Qualcomm then attempted to extort Apple into changing its responses and providing false information to the KFTC in exchange for Qualcomm’s release of those payments to Apple. Apple refused.”

The company allege that Qualcomm declined to license the technology to other companies in a bid to avert them from manufacturing the chips.

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Apple also claimed that Qualcomm collected a separate licensing fee for the chips supplied to it under a “no license, no chip” policy.

The Cupertino, California based company also claim that Qualcomm had put pressure on network carriers to prevent them from selling or supporting devices made with Intel chipsets.

In reply to the lawsuit, Qualcomm executive vice president and general counsel Don Rosenberg 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.”

In December last year, Qualcomm was fined $854m by the KFTC for unfair patent licensing practices, Reuters reported.

Qualcomm also paid a fine of $975m in China in February 2015.

In December 2015, the company was accused by the European Union of abusing its dominant position in the market to prevent competition.

Of late, the US Federal Trade Commission filed a lawsuit against Qualcomm, claiming that it used its market position to impose heavy supply and licensing terms on handset makers.

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