Consumer Class-action Suit Aims at Qualcomm

Article By : John Walko

The allegation is that Qualcomm has been overcharging Samsung and Apple since 2015, with the charges passed on to consumers.

As a long-standing member of Which?, the UK’s consumer champion, I was surprised to get an e-mail from the organization asking me to join a class action it is bringing against Qualcomm.

The consumer watchdog has some 1.5 million members and supporters, but is urging all potentially impacted consumers in the UK to sign up.

The suit relates to all Samsung and Apple smartphones using the Snapdragon chipsets that were purchased in the UK after October 1st 2015.  For Apple users, that would imply iPhone 6s and 6s Plus, and later devices.

It alleges that the chip maker charged Samsung and Apple inflated fees for its patented devices. It calculates that UK consumers could be entitled to between $24 to $42 for Samsung and Apple handsets purchased since 2015, depending on how many sign up for the class action.

Which? suggests any successful outcome would raise £482.5 million (about $673 million).

Annabel Hoult

Annabel Hoult

The organization’s CEO, Annabel Hoult, said in a statement: “We believe Qualcomm’s practices are anti-competitive and have so far taken around £480 million from (UK) consumer’s 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.”

Asked which particular Snapdragon chipsets would be involved in the case, a Which? spokesman said it is “too early to share that information with EE Times.”

Not surprisingly, Qualcomm said the case has no basis. The company issued a statement noting that “as 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 Appeal in the US.”

This references the FTC suit against Qualcomm for unfair practices in the US from 2017. This was finally dismissed last year, after years of wrangling.

Over the years, Qualcomm has lost and won numerous competition authorities worldwide, including with the European Commission and fair trade authorities in South Korea.

The EC case, which started in 2018, fined the firm €997 million (about $1.22 million) for violating competition laws regarding a series of deals it made with Apple. Another case, that commenced in 2019 , it faced another €242 million (about $270 million) fine for abusing its dominant position in the 3G chipset market, following a four year investigation.

Qualcomm appealed against both rulings.

The Which? case is also likely to drag on for many years. The initial step is for the consumer champion to obtain permission from the UK’s Competition Appeal Tribunal to act as class representative so that the claim can proceed.  Which? told EE Times it has lodged the relevant documents last week with the authorities.

If it wins the right, it will argue that Qualcomm is abusing its position and employing an anticompetitive strategy that is in breach of competition law and employs two unlawful practices, the most important of which is that It refuses to license its patents to other competing chipset manufacturers; and that it refuses to supply chipsets to smartphone manufacturers unless those companies obtain a separate license and pay inflated royalties to Qualcomm.

Asked why the organization is taking this action now, Lisa Webb, a senior attorney at Which? told EE Times “those other cases did not directly impact UK consumers. We will be pursuing arguments that have not been covered before.”

Webb also said the action is in some ways related to the UK’s departure from the European Union. The UK’s competition authorities could not consider the case before Brexit, she added.

“We will be proceeding under a relatively new law under the Consumer Rights Act that was passed in 2015. This allows individuals to take on big corporations under a collective action regime.”

This uses an ‘opt out’ address regime rather than the more traditional opt-in, so many who qualify could claim redress if the class action succeeds without necessarily joining at an early stage.

“You will see many more consumer rights issues using this procedure going forward,” Webb said.

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