Apple suppliers including Foxconn file counter suit against Qualcomm

The Apple manufacturers have accused Qualcomm of violating two sections of the Sherman Act, a landmark US antitrust law.
Written by Natalie Gagliordi, Contributor

Another day, another counter claim in the never-ending legal battle between Apple and Qualcomm.

In the latest development, Apple manufacturers Foxconn, Pegatron Corporation, Wistron Corporation, and Compal Electronics have accused Qualcomm of violating two sections of the Sherman Act, a landmark US antitrust law.

The accusations are in response to a counter suit Qualcomm filed against the manufacturers in May, in which the chipmaker accused the companies of breaching their license agreements and withholding royalty payments after Apple instructed them to do so.

"Qualcomm has confirmed publicly that this lawsuit against our clients is intended to make a point about Apple and punish our clients for working with Apple," said Theodore J. Boutrous, a lawyer for the four companies, in a statement to Reuters. "The companies are bringing their own claims and defenses against Qualcomm."

The legal saga between the two companies started in January, when Apple filed a suit against Qualcomm accusing the semiconductor giant of overcharging for chips and withholding nearly $1 billion in contractual rebate payments.

The suit also accused Qualcomm of "attempting to extort" Apple into obstructing an investigation by South Korean regulatory investigators into Qualcomm's monopolistic practices. Additionally, the suit claimed that Qualcomm created an "abusive licensing model" that enabled the company to demand excessive royalties.

Last month, Apple filed a brief to its original lawsuit accusing Qualcomm of operating an illegal business model. Apple claimed that Qualcomm was "double-dipping" by charging both a patent license fee for the use of its technology and for the chip itself.

Earlier this month, Qualcomm filed a complaint with the US International Trade Commission asking it to bar the import of some iPhones and other products into the US. That complaint was tied to Apple's decision to withhold royalty payments to contract manufacturers until the legal dispute with Qualcomm was resolved -- bringing us back to this latest counter suit filed by Apple's suppliers.

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