Qualcomm is getting a $1.2 billion slap on the wrist for unfairly pushing their chips to Apple. Image: Compfight

On December 21st a federal court from San José issued a $25,000 fine per day against Apple for refusing to deliver in a federal lawsuit against Qualcomm. Qualcomm’s lawsuit regards the fact that the company has imposed unfair licensing terms towards smartphone makers, slowly gaining a potential monopoly over mobile chip production.

When asked to hand over legal documents, Apple responded stating that they had “already produced millions of documents for this case and are working hard to deliver the millions more which have been requested in an unprecedented timeframe.” However, Qualcomm refused to make any comments.

Apple has a legal record with Qualcomm. Both companies have been filing lawsuits against each other over the past 3 years. The latest was Cupertino’s lawsuit against Qualcomm’s Snapdragon over allegedly infringing patents owned by Apple and 8 more patents related to battery life and power parts on the iPhone and iPad.

Why did the European Commission fine Qualcomm?

From Brussels, the European Union’s regulators fined for  €997 million the chipmaker Qualcomm, for paying Apple to exclusively use Qualcomm chips on every iPhone in order to block rival companies, as alleged by the EU antitrust regulators, based on the market dominance of the LTE baseband chipmaker.

“Qualcomm paid billions of U.S. dollars to a key customer, Apple, so that it would not buy from rivals. These payments were not just reductions in price – they were made on the condition that Apple would exclusively use Qualcomm’s baseband chipsets in all its iPhones and iPads,” European Competition Commissioner Margrethe Vestager.

Apple claimed that Qualcomm business practices were remarkably illegal based on the “mounting evidence” there is. The iPhone makers have also claimed that Qualcomm is seeking to extract patent royalties from every Apple device that contains its chips.

One of the most notable allegations made by Apple is the unfulfilled obligation to charge at reasonable price rates and the constant actions towards “monopolizing” the phone chip industry.

“We found continuing and mounting evidence of Qualcomm’s perpetuation of an illegal business model that burdens innovation,” Apple attorneys said. “It amounts to a scheme of extortion that allows Qualcomm unfairly to maintain and entrench its existing monopoly.”

What does Qualcomm have to say for itself?

Qualcomm’s lawsuits issued against Apple claim that very few of Apple’s technology is designed by themselves, “Apple employs technologies invented by Qualcomm without paying for them, a few examples of the many Qualcomm technologies that Apple uses to improve its devices and increase its profits.”

One of the intended goals for Qualcomm is to get U.S trade regulators to ban iPhone imports, aiming to (in a different lawsuit) get China to ban iPhone sales in the country. Among the most consistent arguments in Qualcomm’s lawsuits, there is the claim that Apple has a record of stealing patents developed by the chipmaker.

Source: European Commission