“Just days after the Federal Trade Commission sued Qualcomm for antitrust concerns, Apple took an unprecedented step of similarly filling suit against one of its most important suppliers,” Evan Niu writes for The Motley Fool. “The complaints are largely the same, but Apple felt compelled to file its own lawsuit in part to get nearly $1 billion that it says it is owed.”
“According to the complaint, Qualcomm gives Apple rebates that effectively serve as royalty relief, but in exchange Apple has agreed to buy baseband processors exclusively from the company for the past five years,” Niu writes. “It’s these rebates that Qualcomm is now withholding since Apple has cooperated with antitrust regulators around the world.”
Here are the most damning things of which Qualcomm is being accused:
• Qualcomm tried to get Apple to change its testimony
• There’s little enforcement of whether patents are actually essential
• Qualcomm has violated its FRAND commitments
• Rivals never had a chance; Qualcomm cornered the market by leveraging its patent portfolio
• Qualcomm used Apple to kill WiMAX
• This has been going on for nearly a decade
Tons more in the full article – recommended – here.
MacDailyNews Take: Apple obviously sees an opening to finally cut Qualcomm down to size. Hopefully, they’ll be successful, but changes in the political climate that affect change in the business climate could come into play.
SEE ALSO:
Apple’s legal assault on Qualcomm part of iPhone margin grab – January 23, 2017
Qualcomm says Apple’s claims are ‘baseless’ in response to Cupertino’s $1 billion lawsuit – January 21, 2017
Apple sues Qualcomm for $1 billion over onerous licensing practices – January 20, 2017
Qualcomm exec says FTC ‘rushed’ antitrust lawsuit before President-elect Trump’s inauguration – January 19, 2017
FTC alleges Qualcomm forced Apple into iPhone LTE chip deals – January 18, 2017
FTC charges Qualcomm with monopolizing key smartphone chip; alleges extracted exclusivity from Apple in exchange for reduced patent royalties – January 17, 2017
After eating Intel’s mobile lunch, Apple could next devour Qualcomm’s Baseband Processor business – January 20, 2015
Analyst: Apple’s going to dump Intel modems if they keep lagging Qualcomm – December 5, 2016
Yes, Apple is throttling download speeds for iPhone 7 and 7 Plus Verizon and Sprint versions – November 19, 2016
Apple’s modem choices may leave Verizon iPhone users feeling throttled – November 18, 2016
Tests show iPhone 7 Plus models with Qualcomm modem perform significantly better than those with Intel modem – October 20, 2016
No comments from the crowd that was dissing my comments on the previous article on this subject on MDN??
Sounds like reasonable justification for an investigation to me.
Yes, this is no minor lawsuit.
Qualcomm had patents that they licensed to Apple under FRAND agreement, which is fine. But they stepped over the line by agreeing to FRAND licensing of these patents only if Apple would not use any competing company’s technology in the iPhone. And in return for Apple’s “understanding”, Qualcomm would reimburse Apple for the FRAND fees. Nice. But holding the patents hostage to garner exclusivity is clear-cut anticompetitive behavior.
Apple is not entirely blameless as they have been willing participants in this scheme for years, even though they did so at the point of a gun in the financial sense. The question is, why push back now?
So if Apple was receiving a reimbursement for the FRAND fees, does Apple winning the case also mean Apple must return those reimbursements? In essence doesn’t the agreement made between them mean while others were paying the FRAND fees to Qualcomm, Apple was in a situation where no net FRAND fees were paid?
No where does it say NO Net fees. Apple got a refund for being exclusive. QC withheld those refunds illegally.
Period
In the post I was replying to it stated “Qualcomm would reimburse Apple for the FRAND fees.” Normally a reimbursement is for a FULL amount. This agreement has been in force for years, so reimbursements have been made of FRAND fees to the date prior to Apple filing a suit. Therefore, my assumption is that no Net amount was exchanged in FRAND fees for that time period. (Apple paid and then received the amount back) The question I had then was if Apple wins the suit and is awarded an amount, would they have to also return the ‘illegally’ reimbursed FRAND fees to Qualcomm.
Period.
I very much doubt that Apple is too concerned one way or the other about exactly how much of the withheld rebates get returned. I believe that Apple sees this case as primarily being about a company abusing it’s FRAND commitments.
While any refund would be welcome, I think that their primary motivation is to teach a lesson to a company that tried to take advantage of Apple. They want to send very strong signals to other companies that anti-competitive practices are unacceptable. As always, Apple is playing the long game and trying to ensure that future supplier partnerships are based on honest principles.
I can agree with that. In the end I would also like to see Qualcomm come to justice. FRAND should not come with any further conditions to be used in licensing.
Qualcomm were using anti-competitive tactics to try and keep the market entirely to themselves. That is a very serious concern to regulatory bodies around the world.
Wireless chipsets are obviously vital to cellular phones and if Apple wanted to use the best available chipsets, they had no option other than to give in to Qualcomm’s demands at the time
Now that there is finally a viable alternative, Apple is no longer totally reliable on Qualcomm and therefore Apple is in a position to expose what Qualcomm has been doing for the last decade. Qualcomm is so screwed.
As always, the American regulatory and legal system is unpredictable to put it mildly, but this case of withholding agreed rebates and the associated regulatory issue regarding FRAND abuse appear to be pretty clear cut.
The issues about Qualcomm trying to punish Apple for complying with worldwide regulatory bodies and also trying to get Apple to change it’s testimony should be particularly damning. I assume that Apple has solid evidence to support those claims and would regard that as a pivotal aspect of this dispute.