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Apple sues Qualcomm over withholding $1B as ransom in a legal investigation
Apple on Friday announced it's suing iPhone modem supplier Qualcomm, which owns many wireless patents, “after years of disagreement over what constitutes a fair and reasonable royalty”. The suit argues Qualcomm withheld nearly $1 billion in payments it owes to Apple as retaliation because Apple cooperated with the Korea Fair Trade Commission. Last month, Korean regulators slapped Qualcomm with a $850 million fine over its patent-licensing practices.
Apple's suit, filed in federal district court in the Southern District of California, accuses Qualcomm of charging royalties for technologies “they have nothing to do with.” Responding to the complaint, Qualcomm called Apple's claims groundless and said they “misrepresented facts”.
The complaint seeks $1 billion in rebate payments that Apple claims San Diego-based Qualcomm withheld as retribution for its participation in an investigation by South Korea's antitrust regulator.
Qualcomm's treasure trove of patents around a technology that lets handsets and cellular networks communicate account for most of its pretax profit. Just to give you an example, devices sold by Apple and Samsung accounted for nearly half of Qualcomm's $23.5 billion revenue in its latest fiscal year.
Apple in a statement issued to multiple media outlets charged Qualcomm with reinforcing its dominance through exclusionary tactics and seeking onerous terms for patents which are at the heart of the global smartphone industry.