Only a few days after the U.S. Federal Trade Commission sued Qualcomm for antitrust violations, Apple is following in the FTC’s footsteps.
Apple filed a lawsuit on Friday against Qualcomm for alleging not giving a fair licensing agreement for their their technology. Apple claimed that Qualcomm is charging the company for royalties Qualcomm has “nothing to do with.” In addition, Apple accuses Qualcomm of extortion by arguing that the chip manufacturer withheld $1 billion in royalties after Apple cooperated with law enforcement in China and South Korea, which resulted in $975 million and $853 million in fines, respectively.
In Apple’s complaint filed in the the Southern District Court of California, the company argues, “In order to purchase Qualcomm chips or obtain access to patents pledged to a cellular standard, Qualcomm demands that third parties pay Qualcomm a royalty much greater than the value of Qualcomm’s contribution to the standard— a value based on the entire price of the innovative products that only incidentally incorporate the standard.”
In turn, Apple argues that they are required to pay royalties on technologies Qualcomm is not involved with. For example, Apple points out in their complaint that when the company sells an iPhone with additional memory, Qualcomm is able to collect a a larger royalty because of Apple’s technological advancement.
“Apple products are among the most innovative in the world, yet because of its monopoly power, its suppression of the disclosure of information to government agencies investigating Qualcomm, and an abusive licensing model, Qualcomm believes it is entitled to collect its “tribute” on every such improvement,” Apple said in their complaint.
Qualcomm did not take this legal complaint sitting down. In fact, Qualcomm issued a statement regarding the lawsuit. Don Rosenberg, Qualcomm’s general counsel said, “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. Apple has been actively encouraging regulatory attacks on Qualcomm’s business in various jurisdictions around the world by misrepresenting facts and withholding information.”
This news comes after the Federal Trade Commission filed a complaint on Tuesday charging Qualcomm for allegedly using deceptive tactics in order to maintain monopoly control of patented technology frequently used in cell phones and other devices.
Qualcomm was founded in 1985 by Cornell and MIT graduates. Since then, Qualcomm is one of the largest providers of chips and processors in the tech industry.