Apple files $1bn lawsuit again Qualcomm for overpricing

2017 hasn’t started on a very good note for the San Diego-based chip maker, Qualcomm. Early this week, the United States Federal Trade Commission sued Qualcomm for antitrust violations. Now, Apple has also joined in by filing a $1 billion lawsuit against Qualcomm.

Filed in US District Court for the Southern District of California, the lawsuit accuses Qualcomm of overcharging for chips and basic patents. Apple said 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,” Apple said in a statement.

“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,” the Cupertino company further added.

The recent FTC filing also accuses Qualcomm of following a “no license, no chips” policy, which forces Apple to pay separate licensing fees for chips. FTC allegation also focuses on the six-year exclusive partnership between Qualcomm and Apple for CDMA chipsets, where the phone maker would face penalties if it buys chips from another supplier. Since Apple first launched its CDMA-supported version of the iPhone in 2011, “Qualcomm has charged Apple a monopolistic premium for access to CDMA chipsets,” the lawsuit said.

In 2016, Apple ended the partnership with Qualcomm and bought Intel's modem chip for making iPhone 7, which cost Apple to lose rebate money of $1 billion from Qualcomm. With the latest lawsuit, Apple is demanding the same amount from Qualcomm.

Apple also claims that Qualcomm has retaliated for assisting a South Korean investigation against the chipmaker. “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 said.

Last month, South Korea fined Qualcomm $890 million for unfair patent licensing practices.

However, Qualcomm General Counsel Don Rosenberg called Apple's claims "baseless". "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," Rosenberg said in the statement. "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."

Qualcomm, who is currently in partnership with Samsung Electronics Co Ltd for "modem" chips, garnered 40 percent of its recent fiscal year revenue of $23.5 billion from both Samsung and Apple.