Apple Inc is accusing renowned chip maker, Qualcomm, for using anticompetitive tactics in an attempt to maintain a monopoly over a key semiconductor used in mobile phones. Its lawsuit against Qualcomm is worth US$1 billion.
Qualcomm is a major chipset maker which is a supplier to both Apple and Samsung Electronics Co Ltd for top of the line chips which help phones link up to wireless networks. Both companies together accounted for 40% of Qualcomm’s US$23.5 billion revenue as reported in its recent fiscal year.
Apple said that Qualcomm overcharged for the chips it makes and has refused to return US$1 billion in promised rebates from its chip purchases. According to Apple, Qualcomm is withholding rebates because of Apple’s talks with South Korea’s antitrust regulator, the Korea Fair Trade Commission.
There has yet to be a response to a request for comment on Apple’s lawsuit.
Last year, the KFTC fined Qualcomm Inc 1.03 trillion Korean won, about US$854 million dollars in December. Apparently, for what it called unfair practices in patent licensing. Qualcomm said it will fight this case in court.
Further back in February 2015, Qualcomm had been made to pay a US$975 million fine in China after a 14-month investigation and at the same time in December 2015, the European Union accused it of abusing its market power.
Until September last year, Qualcomm was the only supplier of modem chips for Apple’s phones and Intel Corp now supplies about half of the modem chips.
Both Apple and Samsung had weaned off Qualcomm at the same time, and Samsung had switched over to using its own internal chips to make its Galaxy S6 phones but used Qualcomm’s chips for the Galaxy S7.