Qualcomm is the world’s biggest mobile chipmaker and it also supplies mobile chips to Apple. Apple has just filed a lawsuit of $ 1 billion against Qualcomm. Apple has accused Qualcomm of overcharging for its chips and for refusing to pay almost $ 1 billion in rebates for chip purchases that were promised to the company. In a lawsuit filed in the Federal District Court in the Southern District of California, in San Diego, Apple said the money had been promised as a commitment that Apple wouldn’t buy mobile chips from other suppliers or divulge Qualcomm’s intellectual property licensing practices.
Recently even the US government (Federal Trade Commission) filed a lawsuit against Qualcomm for using anti-competitive tactics to maintain its monopoly in the field of key semiconductors used in mobile phones the world over. The commission has accused Qualcomm of using its anti-competitive tactics to guarantee high royalty payments for advanced wireless technology.
Apple claims that Qualcomm has been exhorting royalty money for technology that wasn’t even developed by Qualcomm. For example, the finger scanner technology was developed by Apple but the company is forced to pay a royalty for the technology to Qualcomm. The complaint of the commission claims that Qualcomm obtained “elevated royalties” for its patented intellectual property on wireless communications. Even the other smartphone chip manufacturers have to pay a royalty to Qualcomm for, allegedly, using Qualcomm’s intellectual property. I don’t know what it’s called in English, but in Hindi they often say “paanchon ungliyan ghee mein” – all the fingers dipped in cream (cream isn’t exactly ghee but the message is more or less the same).
More details about the case on the CNBC link.