$ 1 Billion Lawsuit Filed Against Qualcomm by Apple
On 20th Jan, 2017, Apple filed a lawsuit against chip maker, Qualcomm accusing the company of using anti competitive tactics for maintaining monopoly over mobile phone semiconductors.
Qualcomm has been a major supplier of modem chips to Apple as well as Samsung Electronics Co Ltd that help in connecting mobile phones to wireless networks. In the recent fiscal year, Qualcomm made $23.5 billion in revenues from these 2 companies which accounted for nearly forty percent of its revenues.
The lawsuit filed against Qualcomm, Apple is accusing the company of overcharging for chips and not paying $1 billion in promised rebates. Apple also stated that Qualcomm is not paying the rebates following the discussions of Apple with Korea Fair Trade Commission of South Korea. Apple also stated in the lawsuit that Qualcomm also tried extorting Apple to change its responses as well as provide wrong information to KFTC in exchange of the company’s release of those payments to Apple which Apple refused. Qualcomm however was not available for any comments.
In the lawsuit filed, Apple even stated that Qualcomm is refusing to license the technology to different manufacturers so as to prevent them from manufacturing any chips.
The KFTC has already fined Qualcomm $854 million in the month of December and in Feb’ 2015, a fine of $975 million was paid by Qualcomm to China. The European Union has also accused Qualcomm of using its power to prevent stop rivals.
Till the release of the latest iPhone 7 on Sep’ 16, Qualcomm happened to be only supplier of chips for Apple. However for the latest models, Intel Corp supplied nearly half of the chips. According to Stacy Rasgon, Bernstein Research, senior analyst, Qualcomm wasn’t affected largely after losing Apple contract as they got back Samsung during the same time.
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