Apple and Qualcomm Battle for Billions in Licensing Fees
Apple, one of the world’s largest smartphone sellers, and Qualcomm, a world leader in designing smartphone processors and modems, are fighting.
Usually, there is a better relationship between smartphone manufacturers and their suppliers. However, the two have sued one another for billions of dollars in damages.
Their last legal battle was in January during the Federal Trade Commission trial. The U.S. Federal Trade Commission accused Qualcomm of running a wireless chip monopoly, thereby forcing customers (like Apple) to work with them exclusively and for much higher fees than is necessary.
This new case has been estimated at $27 billion and will take five weeks.
The case will determine if Qualcomm is indeed operating a chip monopoly and if they charge too exorbitant of fees. Apple has also accused Qualcomm of anticompetitive practices that boost prices, limit competition and infringe upon customer choice.
Apple’s argument is that they pay Qualcomm essentially twice. First, they pay by buying processors and then they pay a second time for royalty fees. Apple’s partners — Foxconn and Pegatron — agree and have entered the lawsuit against Qualcomm as well.
Qualcomm and Apple did try to come to terms outside of court first, but no solution could be agreed upon.
So, now, it’s in the court’s hands. The jury trial will take place in the southern district of California in San Diego before U.S. District Court Judge Gonzalo P. Curiel.
Apple and their manufacturing partners want a $9 billion refund for overpaid royalties since 2013, allegedly. If the case goes in their favor, the amount could triple under antitrust law.
On the other hand, Qualcomm wants breach of contract damages.
The main concern everyone is thinking about how any changes may impact business models involving iPhones and other Apple devices.
