Mobility

Apple sues Qualcomm for $1B over held money, extortion

A recent lawsuit from Apple alleges that the chip maker overcharged for some of its products and never paid back rebates.

lawsuitapl.jpg
Image: iStockphoto/AVNphotolab

On Friday, Apple filed a $1 billion lawsuit against the chip maker Qualcomm, alleging that the company pursued unfair and monopolistic business practices. Chief among Apple's concerns are that Qualcomm overcharged for its chips and refused to pay back promised rebates, according to a Reuters report.

The $1 billion figure was calculated from the amount Apple claims is due to them in rebates. Apple also claimed that these rebates were held back on account of Apple's conversations with the Korea Fair Trade Commission, Reuters noted.

Additionally, Apple also noted in its suit that Qualcomm had attempted extortion, in that it tried to get Apple to alter is response and provide untrue information. According to Reuters, Apple also accused Qualcomm of requiring Apple to pay an additional licensing fee for chips, as part of a "no license, no chip" policy.

SEE: How Apple will have to earn its next $1 trillion in the cloud

Qualcomm is one of the largest mobile chip manufacturers in the world, and Apple is one of its biggest customers. The patents that Qualcomm holds on its products are meant to be licensed out, but Apple also contended in the lawsuit that Qualcomm wasn't properly licensing them in a bid for a monopoly on the chip market.

While Qualcomm was the main supplier of chips for Apple's iPhone, the Cupertino company recently branched out, utilizing Intel chips in some of its iPhone 7 models. Another allegation from Apple is that Qualcomm put some pressure on network carriers to avoid selling and supporting those Intel-powered iPhones.

However, in an official statement on the complaints, Qualcomm called Apple's claims "baseless."

"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," the statement said. "Apple has been actively encouraging regulatory attacks on Qualcomm's business in various jurisdictions around the world, as reflected in the recent KFTC decision and FTC complaint, by misrepresenting facts and withholding information."

In the statement, Don Rosenberg, executive vice president and general counsel for Qualcomm, said that the company welcomes the opportunity to hear the claims in court.

The 3 big takeaways for TechRepublic readers

  1. Apple is suing Qualcomm for $1 billion over held rebate money and extortion claims.
  2. Apple is claiming that Qualcomm also pressured some carriers to not support the iPhone models that use an Intel chip.
  3. Qualcomm said that Apple's claims are "baseless," and it welcomes a time to hear them in court.

Also see

About Conner Forrest

Conner Forrest is a Senior Editor for TechRepublic. He covers enterprise technology and is interested in the convergence of tech and culture.

Editor's Picks

Free Newsletters, In your Inbox