Apple files lawsuit accusing Qualcomm of withholding patent royalties

Apple has filed a lawsuit against Qualcomm, accusing it of monopolizing the wireless chip market as well as withholding $1 billion in retaliation for cooperating with South Korean antitrust authorities, Bloomberg reports. In the suit, Apple claims that Qualcomm is holding back $1 billion in money that was supposed to be a rebate for licensing fees, stating that Qualcomm is doing so as a punishment in response to Apple’s cooperation with Korean antitrust regulators. Apple is also challenging several key Qualcomm wireless technology patents in the complaint, asking the court to either declare the patents invalid, or if they are upheld, to significantly reduce the royalty amounts that Qualcomm is presently charging for their use.

In December, the South Korean government fined Qualcomm 1.03 trillion won ($890 million), describing its practices as monopolistic. As part of that proceeding, Apple complied with investigation demands from Korean regulators, which Qualcomm claimed was in violation of the contractual agreement it had preventing Apple from taking any steps to challenge Qualcomm’s business model. According to Apple, Qualcomm withheld money that it owed Apple in royalty rebates, offering to pay the money only “if Apple retracted and corrected its statements to government agencies.” The U.S. Federal Trade Commission also filed an antitrust complaint against Qualcomm earlier this week, and the company is also being investigated by the European Union and Taiwanese authorities.

In a statement, Apple said “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.”

Latest News