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Apple files $1B lawsuit alleging 'abusive licensing model' at Qualcomm

Apple Inc. is alleging chipmaker Qualcomm Inc. engaged in an "abusive licensing model" that resulted in billions in overcharges to the iPhone maker, according to a federal lawsuit filed Jan. 20.

The suit, filed in the U.S. District Court for the Southern District of California, claims that Qualcomm uses its market power "to collect its 'tribute'" on every iPhone update, even when such updates have nothing to do with patented Qualcomm technology. Apple also alleges that Qualcomm retaliated against the company for cooperating in a Korea Fair Trade Commission inquiry by withholding $1 billion in agreed upon payments to the iPhone maker. The lawsuit seeks to compel Qualcomm to pay the $1 billion that Apple says it is owed.

Apple's lawsuit references a separate action filed recently by the Federal Trade Commission, which alleges that Qualcomm "has used its dominant position ... to impose onerous and anticompetitive supply and licensing terms on cell phone manufacturers and to weaken competitors." The iPhone maker claims that Qualcomm is "double-dipping" by selling its components to the company and then also requiring Apple to pay separate licensing fees on those components.

In a statement provided to Reuters, Qualcomm rejected Apple's claims and said it welcomed the chance to challenge the suit in court.

"Apple has been actively encouraging regulatory attacks on Qualcomm's business in various jurisdictions around the world ... by misrepresenting facts and withholding information," Qualcomm General Counsel Don Rosenberg said in the statement.