After lawsuit in US, Apple sues Qualcomm in China

PUBLISHED : Thursday, 26 January, 2017, 2:55am
UPDATED : Thursday, 26 January, 2017, 2:55am

Apple filed a lawsuit against Qualcomm in Beijing, alleging the chip supplier abused its clout in the chip industry and seeking 1 billion yuan (US$145.32 million) in damages, Beijing’s Intellectual Property Court said in a statement on Wednesday.

Apple also filed a second lawsuit against Qualcomm which accused it of failing to live up to promises made to license “standard essential patents” broadly and inexpensively.

Qualcomm is a major supplier to both Apple and Samsung Electronics for “modem” chips that connect phones to wireless networks. The two companies together accounted for 40 per cent of Qualcomm’s $23.5 billion in revenue in its most recent fiscal year.

In an emailed statement, Qualcomm said it had not yet seen the full complaints against it filed in the Chinese court. But Don Rosenberg, executive vice president and general counsel of Qualcomm, said Qualcomm had offered Apple the same terms as other customers after a 2015 regulatory ruling in China and that his firm would defend its business model in Chinese courts.

“These filings by Apple’s Chinese subsidiary are just part of Apple’s efforts to find ways to pay less for Qualcomm’s technology,” Rosenberg said in the statement. “Apple was offered terms consistent with terms accepted by more than one hundred other Chinese companies and refused to even consider them.”

The lawsuits follow a decision by the US Federal Trade Commission to file a complaint on January 17 in which it accused Qualcomm of using anticompetitive tactics to maintain its monopoly of a key semiconductor used in mobile phones.

Apple followed with a related lawsuit last Friday. It asked a federal court in California for $1 billion in promised rebates and accused Qualcomm of overcharging for chips.

Apple sues Qualcomm for US$1 bln over royalties

Qualcomm said previously that it would contest both the FTC and the Apple lawsuit filed in the United States. The chip maker faces legal challenges across the globe.

South Korea’s antitrust regulator fined Qualcomm 1.03 trillion won ($854 million) in December for what it called unfair practises in patent licensing, a decision the US chipmaker said it will challenge in court.

In February 2015, Qualcomm paid a $975 million fine in China following a 14-month probe, while the European Union in December 2015 accused it of abusing its market power to thwart rivals.