Apple sues Qualcomm over patent royalties in antitrust case

Apple has sued Qualcomm, accusing it of monopolizing the market for chips for wireless devices and withholding $1 billion in retaliation for cooperating with South Korean antitrust authorities.

Qualcomm is holding back the money as punishment for Apple cooperating with Korean antitrust regulators, according to the complaint filed in San Diego, where Qualcomm has its headquarters.

The Cupertino company also wants back some of the billions of dollars it claims it was overcharged in “Qualcomm’s illegal scheme” to control the market for mobile phone chips.

Qualcomm, the largest maker of mobile phone chips, has been under fire by regulators around the world for its patent licensing practices.

The lawsuit filed Friday is the first direct challenge by one of its biggest customers and threatens to upend how royalties are calculated by any owner of a patent on technology that underlies modern electronics.

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.

Qualcomm offered to pay the money “if Apple retracted and corrected its statements to government agencies,” according to the complaint.

At the heart of the dispute between Apple and Qualcomm is a push by phone makers with the support of regulators to reduce the patent royalties Qualcomm charges.