Apple sues Qualcomm for $1 billion over excessive royalties

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The news just keeps on getting worse for Qualcomm this week. A couple of days ago the FTC filed a lawsuit against the chip maker alleging that it has engaged in unfair patent licensing practices, and today it’s Apple’s turn to sue Qualcomm.

Apple’s lawsuit has to do with what it claims are excessive royalties charged by Qualcomm for use of basic cellular standards that it contributed to developing in the past.

Furthermore, Apple says that once it began cooperating with South Korean authorities in their antitrust investigation of Qualcomm, the chip maker withheld $1 billion in retaliation. Here’s Apple’s full statement on the matter:

For many years 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. 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.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 believes deeply in innovation and we have always been willing to pay fair and reasonable rates for patents we use. We are extremely disappointed in the way Qualcomm is conducting its business with us and unfortunately after years of disagreement over what constitutes a fair and reasonable royalty we have no choice left but to turn to the courts.

Apple wants roughly $1 billion from Qualcomm as compensation for this behavior. Qualcomm hasn’t yet commented on Apple’s allegations and lawsuit.

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