Qualcomm just can't catch a break. The company responded to another series of lawsuits from Apple, this time in China, accusing the component maker of abusing the popularity of its products to extract high royalty fees and restrictive license agreements from the manufacturers with which it works.
Apple previously filed suit against Qualcomm in a San Diego federal court. The company was seeking $1 billion in the suit; now, reports indicate that Apple seeks 1 billion yuan from the lawsuits filed in Beijing. (Apple has not mentioned any of the cases on its website or responded to request for comment from Tom's Hardware.) What seemed like a squabble between partners has become a battle that will be fought in courts around the world.
Here's how Apple described its San Diego suit in a statement to CNBC:
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.
Qualcomm said at the time that it's "quite clear that Apple's claims are baseless" and that the company "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." It also accused the company of pushing the Federal Trade Commission (FTC) to investigate Qualcomm.
The FTC has already done just that. It filed a complaint on January 18 alleging that Qualcomm uses its baseband processors--which control a device's connection to wireless networks--to extort its customers and prevent other companies from introducing competitive products. According to the commission, this has contributed to rising costs in the smartphone market that ultimately lead to consumers paying higher prices for new products.
Qualcomm pushed back on the FTC's claims as well. "In our recent discussions with the FTC, it became apparent that it still lacked basic information about the industry and was instead relying on inaccurate information and presumptions," Qualcomm executive vice president and general counsel Dan Rosenberg said in a statement. Rosenberg also said that the FTC was merely rushing to file a claim before Donald Trump was sworn in as president.
Now he's defended Qualcomm from Apple's latest claims:
These filings by Apple's Chinese subsidiary are just part of Apple's efforts to find ways to pay less for Qualcomm's technology. Apple was offered terms consistent with terms accepted by more than one hundred other Chinese companies and refused to even consider them. These terms were consistent with our NDRC Rectification plan. [...] Qualcomm is prepared to defend its business model anywhere in the world. We are proud of our history of contributing our inventions to the development and success of the mobile communications ecosystem.
So which is it: Is Apple the boy who cried wolf, or is Qualcomm merely protesting too much? We'll find out when at least one of these cases leaves the public relations stage and heads to a courtroom.
