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Apple continues antitrust fight with Qualcomm with two new lawsuits

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tim cook

Apple is continuing its legal assault on Qualcomm with two new lawsuits filed today in Beijing.

In the first lawsuit, Apple is seeking 1 billion yuan (over $145 million USD), according to Reuters, claiming that Qualcomm violated China’s anti-monopoly law and harmed it by abusing the company’s market position as a dominant chip supplier.

Details are slim right now, but it’s likely that this is an extension of the recent lawsuits against Qualcomm in the US, which claim that Qualcomm has been using its position to extort undeservedly high patent licensing fees.

There’s also a second lawsuit that specifically focuses on patent deals, with Apple asking for the court to rule on the terms of a licensing agreement between the two companies. In the US, there are already claims against Qualcomm for failing to license standard-essential patents on fair, reasonable, and non-discriminatory (“FRAND”) terms, and this sounds like it could be related.

Qualcomm said that it was “prepared to defend its business model” but had not yet seen the two lawsuits. “These filings by Apple’s Chinese subsidiary are just part of Apple’s efforts to find ways to pay less for Qualcomm's technology,” Don Rosenberg, Qualcomm’s general counsel, said in a statement. “Apple was offered terms consistent with terms accepted by more than one hundred other Chinese companies and refused to even consider them.”

Apple declined to provide a new statement but pointed to the remarks it issued on Friday, when its initial lawsuit was filed. At the time, Apple said that Qualcomm “has unfairly insisted on charging royalties for technologies they have nothing to do with” and has been “charging Apple at least five times more in payments than all the other cellular patent licensors we have agreements with combined.”

Apple’s lawsuits come just days after the US Federal Trade Commission accused Qualcomm of many of these same tactics.

The FTC began suing Qualcomm last Tuesday, saying that it was using its position as the primary modem supplier for smartphones to get “disproportionately high” patent licensing fees. Qualcomm allegedly told smartphone manufacturers that if they didn’t agree to the terms, it wouldn’t supply them with modems, which would essentially mean that they couldn’t make a widely available phone.

Qualcomm has denied all off the FTC’s claims, as well as all of the claims Apple made in the lawsuit it filed last Friday. It’s even considering a countersuit.

The flurry of lawsuits are potentially quite bad news for Qualcomm. Though Qualcomm is best known for making smartphone processors — its Snapdragon chips are in all the top Android phones — most of its money actually comes from licensing out patents. These lawsuits claim that revenue stream is far larger than it ought to be.

Apple and the FTC aren’t the only ones with the idea that Qualcomm has been abusing its position. China fined Qualcomm $975 million over patent licensing issues in 2015, and South Korea recently hit Qualcomm with a 1.03 trillion won (around $883 million USD) fine, which Qualcomm has indicated it intends to challenge.

Update January 25th, 2:15PM ET: This story has been updated with remarks from Apple.