Apple contractors Foxconn, Pegatron, Wistron, and Compal Electronics have filed an antitrust lawsuit against Qualcomm alleging that the company has violated two sections of the U.S. based Sherman Act.
This is the latest and an ongoing battle between over wireless patent royalties.
Qualcomm is the market leader in smartphone modems and a primary supplier to Apple, yet Apple doesn’t have a direct patent deal with Qualcomm.
Instead, Qualcomm requires Apple’s contractors to sign patent license agreements before purchasing chips, which the US Federal Trade Commission called in its own complaint a “no license, no chips” model.
Besides paying for the wireless chips themselves, Apple covers the licensing fees to the four manufacturers who then pay Qualcomm, this allows Qualcomm to take a percentage of the overall iPhone selling price in exchange for supplying the modem chips.
Apple stopped making royalty payments to its contractors after it sued Qualcomm in January for $1 billion.