TLDR
- Qualcomm is defending against a $647 million lawsuit in London brought by consumer group Which? on behalf of 29 million smartphone buyers
- The case alleges Qualcomm forced Apple and Samsung to pay inflated royalties for chip technology even when Qualcomm chips weren’t used in devices
- Around 29 million UK consumers who bought iPhones or Samsung phones between 2015 and 2024 could receive roughly $22 each if Which? wins
- The trial will first determine if Qualcomm abused market dominance before any compensation phase begins, which could take years
- QCOM stock remained flat despite the lawsuit news, trading down just 0.16% on Monday
The chipmaker is back in court. Qualcomm started defending itself Monday against a 480 million pound lawsuit in London’s Competition Appeal Tribunal.
Consumer advocacy group Which? filed the case on behalf of roughly 29 million people who purchased iPhones or Samsung devices since 2015. They claim Qualcomm’s licensing practices drove up smartphone prices.
The heart of the complaint centers on Qualcomm’s “no license, no chips” policy. Which? argues this approach forced phone manufacturers to pay royalties for Qualcomm’s patents regardless of whether they actually used Qualcomm chips in their devices.
Lawyers for Which? described the practice as “an industry-wide private tax” that boosted Qualcomm’s profits while inflating device costs. The five-week trial kicked off Monday in London.
Qualcomm Pushes Back on Claims
Qualcomm denies the allegations. The company says the lawsuit misrepresents its standard requirement that manufacturers license its essential patents before purchasing chipsets.
The chipmaker’s legal team also pushed back on suggestions that it could dictate terms to giants like Apple and Samsung. They argue these manufacturers “can and do exert enormous buyer power” in negotiations.
Qualcomm previously called the case baseless. The company faces similar legal challenges in other markets, including an antitrust class action in British Columbia over alleged price-fixing.
Potential Payouts and Timeline
If Which? prevails, each affected consumer could receive around 17 pounds per device purchased. That works out to roughly $22 per smartphone.
But don’t expect quick resolution. Which? senior lawyer Lisa Webb told the BBC the process has been slow. The group filed the claim back in 2021.
The current trial only addresses whether Qualcomm held market power and abused it. A second phase would handle actual compensation. That stage could drag on for years.
Which? chief executive Anabel Hoult called the trial a “huge moment.” She said it demonstrates how consumer power can hold major corporations accountable.
Consumers don’t need to take any action. If Which? wins, the organization will distribute compensation automatically.
The case mirrors a 2023 California lawsuit that was dismissed. That case also challenged Qualcomm’s patent licensing and chip agreements with manufacturers.
Qualcomm faces another challenge on the horizon. Its multi-billion dollar modem chip contract with Apple is nearing expiration. Apple is expected to bring modem production in-house.
The UK market represents a small portion of Qualcomm’s overall business. Still, the case could deliver both reputational and financial damage.
QCOM stock showed little reaction to the news. Shares traded down just 0.16% on Monday. The stock currently has a Moderate Buy rating from analysts with a consensus price target of $181.67.
