Apple is suing Qualcomm, the chip supplier company for roughly $1 billion. Apple says Qualcomm is “charging royalties for technologies they have nothing to do with.” The suit follows the U.S. Federal Trade Commission’s lawsuit against Qualcomm earlier this week over unfair patent licensing practices.
Qualcomm is a major supplier to both Apple and Samsung Electronics Co Ltd for “modem” chips that connect phones to wireless networks. The two companies together accounted for 40 percent of Qualcomm’s $23.5 billion in revenue in its most recent fiscal year.
According to CNBC reports, Apple says that Qualcomm has taken “radical steps,” including “withholding nearly $1 billion in payments from Apple as retaliation for responding truthfully to law enforcement agencies investigating them.”
Apple added, “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.”
In a statement, Qualcomm General Counsel Don Rosenberg called Apple’s claims “baseless.”
Qualcomm’s stock closed 2.4 percent lower at $62.88 on the news.
Qualcomm has patents for chips which include standard essential patents, a term used to describe technology that is required to be licensed broadly and on “reasonable” terms.
In its lawsuit, Apple accused Qualcomm of refusing to license the technology to other manufacturers to prevent them from making the chips. It also accused Qualcomm of selling chips while requiring Apple to pay a separate licensing fee for the same chips, in a “no license, no chip” policy.
In addition, Qualcomm pressured network carriers to not sell or support Apple devices made with Intel chipsets Apple said.
The KFTC fined Qualcomm $854 million in December for what it called unfair patent licensing practices.
In February 2015, Qualcomm paid a $975 million fine in China, while the European Union in December 2015 accused it of abusing its market power to thwart rivals.
On Tuesday, the U.S. Federal Trade Commission filed a lawsuit against Qualcomm, saying the San Diego-based company used its dominant position as a supplier of certain phone chips to impose “onerous” supply and licensing terms on cellphone manufacturers. Qualcomm said it would contest the FTC complaint.
