U.S. chipmaker Qualcomm is facing a £480 million ($646.8 million) lawsuit in London’s Competition Appeal Tribunal (CAT) over allegations that it abused its dominant market position to impose inflated royalty charges on smartphone makers Apple and Samsung. The case, brought by UK consumer advocacy group Which?, could see around 29 million smartphone users eligible for compensation if the claims are upheld, Reuters news report said.
Allegations of Inflated Royalties and Anti-Competitive Conduct
The lawsuit alleges that Qualcomm’s “no licence, no chips” policy forced Apple and Samsung to pay excessive royalties, even for devices that did not use Qualcomm’s chips. According to Which?, this practice allowed the chipmaker to inflate smartphone prices and extract “an industry-wide private tax,” unfairly enriching itself at the expense of consumers.
Lawyers representing the consumer group stated in court filings that Qualcomm’s licensing practices distorted fair market competition, resulting in higher retail prices for millions of iPhones and Samsung Galaxy devices sold since 2015.
The trial, set to last five weeks, aims to determine whether Qualcomm is liable to the claimant class of affected UK consumers. If the tribunal rules in favor of Which?, a second trial will establish the compensation amount owed to affected buyers.
Qualcomm’s Defense: Standard Industry Licensing
Qualcomm, a key supplier of mobile processors and standard essential patents (SEPs) used in 4G and 5G technologies, has rejected the allegations, arguing that its licensing model follows global industry standards.
The company maintains that manufacturers are required to obtain licenses for its patented technologies before purchasing chipsets, ensuring compliance with fair, reasonable, and non-discriminatory (FRAND) terms.
In its defense filings, Qualcomm stated that the lawsuit “mischaracterizes long-standing industry practices” and underestimates the negotiating power of Apple and Samsung, both of which are large, influential players capable of securing favorable contract terms.
Legal Background and Global Context
The UK case mirrors similar antitrust challenges Qualcomm has faced in other jurisdictions. A U.S. consumer lawsuit in California, which accused the company of anti-competitive licensing practices and exclusive chip supply agreements with Apple and others, was dismissed in 2023.
However, the European Commission and other global regulators have previously fined Qualcomm for abusing market dominance in the smartphone chip industry, particularly in cases involving exclusive agreements and predatory pricing.
The current UK collective action could mark a significant precedent in holding multinational technology companies accountable for alleged anti-competitive behavior affecting consumers directly.
Implications for Smartphone Buyers and the Tech Industry
If Which? succeeds, the case could lead to millions of UK consumers receiving compensation for inflated smartphone prices, potentially influencing future licensing practices in the global semiconductor industry.
Legal experts say the ruling could reshape how patent licensing fees are structured, especially for standard essential technologies that underpin the modern mobile ecosystem. It may also prompt regulators to increase scrutiny of patent licensing models that affect downstream device pricing.
The Competition Appeal Tribunal’s decision in this case will be closely watched by policymakers, telecom operators, and chip manufacturers worldwide, as it could set new legal standards for how intellectual property is monetized in the tech supply chain.
TelecomLead.com News Desk