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Qualcomm accused under antitrust violations by Apple contractors

Qualcomm Inc, the company which supplies chips for Apple’s iPhones is being confronted by a new set of antitrust allegations from a group of four companies Foxconn, Wistron, Compal Electronics and Pegatron which also are Apple’s contractors.

In May, a lawsuit was filed against Qualcomm, who allegedly has been forcing the contractors to pay Qualcomm license fees which Apple had directed them to stop paying. The accusations which were made in filing on Tuesday, are counterclaims to the same.

The allegations have a broader spectrum. Qualcomm, who provides modern chip technology that allows iPhones to connect to cellular data networks over the Qualcomm’s business model of linking the sale of chips and patent licenses was reviewed by regulators in South Korea, the United States and several other countries.

iPhone Qualcomm

In January, Apple allegedly claimed that Qualcomm owes them around $1 billion of patent license rebates in reprisal for the cooperation of Apple with regulators from South Korea. Then Apple asked its contract manufacturers to refrain from paying license payments to Qualcomm due to which the chip manufacturing giant sued them in May. In July, Qualcomm asked the US government to ban the sale of iPhones in the country as well as ban any new iPhones from coming into the country.

Qualcomm, for its unethical, anti-competitive practices is already being sued by United States Federal Trade Commission. In contradiction to the accusations made by Apple and others, Qualcomm said that it has never withheld in order to obtain agreement to unfair licensing terms.

Even though Qualcomm is the primary supplier to Apple, Apple does not have a linear deal with Qualcomm. It pays licensing fees to the four Taiwanese manufacturers who then pay Qualcomm. Since January, Apple has stopped paying them because of the legal battle which has increased the turmoil further.

Analysts have suggested that there will be a drop of $800 million in Qualcomm’s annual revenue post the loss.

 

 

 

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