Apple has sued Qualcomm for $1 billion on Friday. This comes after an accusation by the US government of Qualcomm Inc. trying to maintain monopoly by using anti-competitive tactics.
Qualcomm supplies Apple and Samsung Electronics with “modem” chips that enable phones to connect to cellular networks. The two companies account for 40% of Qualcomm’s $23 billion revenue.
Apple has accused Qualcomm of excessive fees charged on the chips and the refusal of Qualcomm to pay $1billion in rebates promised. Qualcomm is said to have held the rebates after Apple cooperated with the Korea Fair Trade Commission (KFTC); South Korea’s antitrust regulator.
According to a daily paper, Qualcomm made an attempt to influence Apple’s responses and tried manipulating it to provide false information to KFTC in return for the release of the $1billion, Apple refused.
Through their General Counsel Don Rosenberg, Qualcomm says that Apple has had a hand in encouraging regulatory attacks on Qualcomm in various countries citing KFTC and FTC by either withholding information or giving false information to the authorities concerned.
Apple has also attacked Qualcomm on its “no license, no chip” policy where Qualcomm requires licensing fees to use its products and sells to you the same product thus earning twice. Apple says that these fees will sometimes reach an average of 5% of every iPhone sold despite the fact that Apple keeps adding extra features like larger screens and better cameras that increase the value of the iPhone
Apple moved to Intel chipsets with half of the flagship iPhone 7 phones having an Intel chipset. This might have angered Qualcomm who have proceeded to try to influence network carriers not to support the Intel chipsets on the iPhone 7.
Apples move to Intel chipsets coincided with Samsung Electronics’ move back to Qualcomm chipsets for the Samsung Galaxy S7. This is after it earlier switched to its own internal chips for the previous Galaxy models.
Qualcomm has been at loggerheads with authorities having paid $975 million in China on February 2015 in fines. KFTC also fined the company $854 million in December for unfair patent licensing practices.
Apple’s suit comes just days after the US Federal Trade Commission went to court alleging Qualcomm’s attempt at maintaining a monopoly on a chip used by almost all cellphones. According to Qualcomm, the suit is based on inaccurate information and was hurriedly put together ahead of the change of guard at the Whitehouse.
Qualcomm says that its licensing model benefits all in the industry and is the most effective and logical approach for everyone in the industry
Qualcomm stocks closed at $62.88 on Friday, a 2.4% fall.