A Qualcomm sign in front of one of its many buildings in San Diego. REUTERS/Mike Blake
A Qualcomm sign in front of one of its many buildings in San Diego. REUTERS/Mike Blake

Computer giant Apple announced Friday that it sued Qualcomm, accusing the defendant of withholding $1 billion, but the San Diego-based company dismissed the claims as “baseless.”

“For many years Qualcomm has unfairly insisted on charging royalties for technologies they have nothing to do with,” Apple said in a statement. “The more Apple innovates with unique features such as TouchID, advanced displays, and cameras, to name just a few, the more money Qualcomm collects for no reason and the more expensive it becomes for Apple to fund these innovations.”

Cupertino-based Apple claimed Qualcomm, which provides technology for mobile devices, “reinforces its dominance through exclusionary tactics and excessive royalties.”

“Despite being just one of over a dozen companies who contributed to basic cellular standards, Qualcomm insists on charging Apple at least five times more in payments than all the other cellular patent licensors we have agreements with combined,” Apple said.

“To protect this business scheme Qualcomm has taken increasingly radical steps, most recently withholding nearly ($1 billion) in payments from Apple as retaliation for responding truthfully to law enforcement agencies investigating them,” the statement said.

The Apple lawsuit comes three days after the Federal Trade Commission sued Qualcomm for business practices that were allegedly designed to gain a monopoly.

Qualcomm said in its own statement by Don Rosenberg, executive vice president and general counsel, that “Apple has intentionally mischaracterized our agreements and negotiations, as well as the enormity and value of the technology we have invented, contributed and shared with all mobile device makers through our licensing program.”

“Apple has been actively encouraging regulatory attacks on Qualcomm’s business in various jurisdictions around the world, as reflected in the recent KFTC decision and FTC complaint, by misrepresenting facts and withholding information,” Rosenberg said, also referring to a complaint in South Korea.

“We welcome the opportunity to have these meritless claims heard in court where we will be entitled to full discovery of Apple’s practices and a robust examination of the merits.”

In its complaint, the FTC contended that Qualcomm signed Apple to an exclusivity deal from 2011 to last year that lowered royalty payments but prevented Apple from acquiring processors from Qualcomm’s competitors unless they pay a penalty.

Apple accused San Diego-based Qualcomm of overcharging for its chips and for refusing to pay some $1 billion in promised rebates for chip purchases in the lawsuit. The complaint says that Qualcomm withheld the rebates because of Apple’s discussions with South Korea’s antitrust regulator.

“We are extremely disappointed in the way Qualcomm is conducting its business with us and unfortunately after years of disagreement over what constitutes a fair and reasonable royalty we have no choice left but to turn to the courts,” Apple told the Wall Street Journal.

The earlier Federal Trade Commission lawsuit accuses the chip maker of using anti-competitive tactics to maintain its monopoly of a key semiconductor used in mobile phones.

Qualcomm is the world’s dominant supplier of baseband processors – devices that manage cellular communications in mobile products.

The company has said it will fight the FTC suit, which it says is based on inaccurate information and was rushed out before Donald Trump became President.

Chris Jennewein

Chris Jennewein is Editor & Publisher of Times of San Diego.