Qualcomm fights $647 million UK lawsuit over smartphone chip royalties

Qualcomm is fighting a 480 million-pound ($646.8 million) London lawsuit brought on behalf of smartphone owners, which alleges the chipmaker has abused its dominant position to force Apple and Samsung to pay inflated royalties.

A British consumers’ association that goes by the name of Which? is bringing the case and its lawyers say around 29 million people who bought iPhones or Samsung devices since 2015 are entitled to compensation.

The group alleges Qualcomm made the manufacturers pay inflated royalties even if its chips are not used in a device under a worldwide so-called no licence, no chips policy.

Lawyers representing Which? said in court documents prepared for a five-week trial starting on Monday that this operates as “an industry-wide private tax which ensures higher profits for Qualcomm and inflates the cost of devices.”

Qualcomm, however, says the lawsuit mischaracterises its long-standing requirement for manufacturers to obtain a licence for its standard essential patents before buying chipsets.

The company’s lawyers also rejected the suggestion by Which? that Qualcomm could demand certain royalties from Apple and Samsung, who “can and do exert enormous buyer power”.

The case brought by Which? at London’s Competition Appeal Tribunal is to determine whether Qualcomm is liable to the claimant class, with a further trial to determine any damages if Which? is successful.

A similar consumer lawsuit against Qualcomm in California, which challenged the company’s patent licensing and exclusive-dealing chip agreements with Apple and other manufacturers, was dismissed in 2023.