$680M Lawsuit Alleges Qualcomm Unfairly Drove Up Apple And Samsung Phone Prices

Qualcomm Sign
A consumer rights group in the United Kingdom is suing Qualcomm, a major chipmaker in the United States, for allegedly abusing its position to overcharge for chip and patent licensing. According to the lawsuit, Qualcomm's actions led to consumers paying too much for smartphones produced by Apple and Samsung, and is seeking £482.5 million (around $680 million in US currency) in damages.

"We believe Qualcomm’s practices are anticompetitive and have so far taken around £480 million from UK consumers’ pockets—this needs to stop. We are sending a clear warning that if companies like Qualcomm indulge in manipulative practices which harm consumers, Which? is prepared to take action," said Anabel Hoult, CEO of Which?, a consumer advocacy group in the UK.

Qualcomm's chipsets and technologies are widely used in the smartphone industry, from its cellular modems found in iPhone devices, to its Snapdragon processors that power scores of Android phones, including many of Samsung's Galaxy devices (Samsung uses Snapdragon processors in phones sold in the US and its own Eyxnos silicon in certain other territories).

According to Which?, Qualcomm abused its dominant position in the market to charge "inflated fees for technology licenses" used by Apple and Samsung, which ultimately were "passed on to consumers in the form of higher smartphone prices." The consumer advocacy group reckons around 29 million British consumers might be eligible for compensation "after being overcharged" for Apple and Samsung handsets.

“If Qualcomm has abused its market power it must be held to account. Without Which? bringing this claim on behalf of millions of affected UK consumers, it would simply not be realistic for people to seek damages from the company on an individual basis—that’s why it’s so important that consumers can come together and claim the redress they are entitled to," Hoult added.

The advocacy group is publicly urging Qualcomm to settle the matter out of court, by agreeing to compensate smartphones owners affected by the company's alleged actions.

That is not likely to happen. A spokesperson for Qualcomm told CNBC there is "no basis for this lawsuit," adding the plaintiffs are well aware "their claims were effectively put to rest last summer by a unanimous panel of judges at the Ninth Circuit Court of Appeals in the United States."

Thumbnail/Top Image Source: Kārlis Dambrāns (via Flickr)