Qualcomm, the San Diego-based chip manufacturing company behind the powerful Snapdragon chipset for mobile devices, is now being sued for $1 billion by tech supergiant Apple for alleged overcharging of technology that Qualcomm had no involvement in.
In a statement from the company, Apple writes,
“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.”
This lawsuit comes on the heels of a similar suit pressed by the Federal Trade Commission on January 17th on the ground of ‘anti-competitive tactics’. According to the FTC, Qualcomm has consistently maintained their dominant position by infringing on the ability of companies to produce their products.
The suit reads,
“According to the complaint, by threatening to disrupt cell phone manufacturers’ supply of baseband processors, Qualcomm obtains elevated royalties and other license terms for its standard-essential patents that manufacturers would otherwise reject. These royalties amount to a tax on the manufacturers’ use of baseband processors manufactured by Qualcomm’s competitors, a tax that excludes these competitors and harms competition. Increased costs imposed by this tax are passed on to consumers.”
Currently, Apple has been developing their latest handsets — the iPhone 7 — with two different chipsets provided by Intel and Qualcomm.
At the moment, Qualcomm has not commented on either suit and still maintains a dominant position as a majority of handsets available on the market are powered by Qualcomm chipsets.