Apple suing Qualcomm for $1 billion over unfair royalties | News | DW | 21.01.2017
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Apple suing Qualcomm for $1 billion over unfair royalties

Apple is suing mobile chip maker Qualcomm over claims it abused market power to demand unfair royalties. Apple uses Qualcomm products in its mobile devices to work with telecommunication networks.

Technology giant Apple sued mobile chip producer Qualcomm in San Diego federal court Friday for $1 billion (934 million euros) for charging unfair royalties on innovations on the iPhone, Apple's popular mobile phone.

In an email to French press agency AFP, Apple charged that "to protect this business scheme Qualcomm has taken increasingly radical steps, most recently withholding nearly $1 billion in payments from Apple as retaliation for responding truthfully to law enforcement agencies investigating them."

In the 100-page complaint, Apple stated Qualcomm demanded royalties on Apple's fingerprint identification system on recent versions of the iPhone, as well as larger storage capabilities on the mobile phones, according to the lawsuit.

Qualcomm rejected Apple's claims. "Apple has been actively encouraging regulatory attacks on Qualcomm's business in various jurisdictions around the world…by misrepresenting facts and withholding information," said Qualcomm executive vice president Don Rosenberg in a statement.

Apple uses Qualcomm products in its iPhones and iPad tablets to work with telecommunication networks. 

Qualcomm in trouble

The Apple suit comes three days following the Federal Trade Commission (FTC) filed a lawsuit stating Qualcomm imposed unfair licensing terms on manufacturers. Apple also noted Qualcomm's license terms in its suit. Qualcomm called the FTC suit "significantly flawed."

Qualcomm is in hot water in South Korea as well, as regulators in the Asian country imposed a fine of over $850 million against the San Diego-based Qualcomm in December for violating the country's antitrust laws. Qualcomm is fighting this decision.

Moor Insights and Strategy analyst Patrick Moorhead told AFP that the antitrust suits against Qualcomm may cause rival chip producers to gain ground.

"I think Apple is not comfortable in feeling that they have only one source and are taking this opportunity to go after Qualcomm," said Moorhead.

"Qualcomm is being looked at on every continent on the planet; this is probably, strategically, the right time for Apple to do this," Moorhead added.

Qualcomm shares fell 2.4 percent and Apple shares edged up just below 0.2 percent Friday.

kbd/kl (AFP, AP)

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South Korea fines Qualcomm

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