Apple suing iPhone modem supplier Qualcomm for $1 billion following FTC monopoly complaint

CNBC reports that Apple is suing chip supplier Qualcomm for roughly $1 billion over patent royalties:

Apple is suing Qualcomm for roughly $1 billion, saying Qualcomm has been “charging royalties for technologies they have nothing to do with.” […] Apple says that Qualcomm has taken “radical steps,” including “withholding nearly $1 billion in payments from Apple as retaliation for responding truthfully to law enforcement agencies investigating them.”

The latest development follows an FTC complaint alleging Qualcomm engaged in monopolistic practices to prevent Apple from sourcing key components from its competitors.

The new report adds that Apple alleges Qualcomm withheld $1 billion in retaliation for working with South Korean authorities where Qualcomm was recently found to be engaging in anti-competitive behavior.

Apple relied on Qualcomm modems in iPhones and iPads up until the iPhone 7 which added Intel as a supplier in certain models. Apple is now accusing Qualcomm of charging it “at least five times more in payments than all the other cellular patent licensors we have agreements with combined.”

CNBC has this statement from Apple on the lawsuit:

“For many years Qualcomm has unfairly insisted on charging royalties for technologies they have nothing to do with. The more Apple innovates with unique features such as TouchID, advanced displays, and cameras, to name just a few, the more money Qualcomm collects for no reason and the more expensive it becomes for Apple to fund these innovations. 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.

Apple believes deeply in innovation and we have always been willing to pay fair and reasonable rates for patents we use. We are extremely disappointed in the way Qualcomm is conducting its business with us and unfortunately after years of disagreement over what constitutes a fair and reasonable royalty we have no choice left but to turn to the courts.”