Qualcomm Antitrust Class Action Lawsuits Headed for Consolidation

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Qualcomm Inc. has asked the U.S. Judicial Panel on Multidistrict Litigation to consolidate 24 antitrust lawsuits that accuse the computer chip maker of fixing the price of modem chipsets used in cellphones made by Apple Inc. and others.

Plaintiffs in these Qualcomm antitrust class action lawsuits allege the company has been abusing its disproportionate share of the market for essential cellular communications technology. They allege Qualcomm’s anti-competitive behavior has caused consumers to pay too much for smartphones and tablets.

Parties on both sides of the litigation agree that the actions need to be consolidated into a single multidistrict litigation, or MDL. The remaining issue is which federal court in California should conduct the MDL once it’s created.

Private plaintiffs have filed complaints in both the San Francisco-based Northern District and the San Diego-based Southern District. The private plaintiffs have asked the federal Judicial Panel on Multidistrict Litigation to centralize all related cases in either the Northern District or the Southern District.

Defendant Qualcomm is now asking the federal Judicial Panel on Multidistrict Litigation to set up the MDL in the San Diego-based U.S. District Court for the Southern District of California.

Qualcomm notes that the Southern District is home to the company’s own headquarters, where most of the witnesses and documentary evidence is located. On the other side of the litigation, the several private plaintiffs have no particular connection to either forum, the company says.

Qualcomm also says a forum selection clause in its contract with Apple Inc. requires any litigation between them to take place in the Southern District.

In addition to the private Qualcomm antitrust class action lawsuits, the Federal Trade Commission has a related enforcement action pending in the Northern District. Qualcomm notes that consolidating the FTC action is outside the Panel’s authority.

At the same time, a requirement that the FTC action proceed independently prevents it from functioning as a hook to bind the private actions to the Northern District, the company argues.

The Qualcomm antitrust fracas began in December of last year, after Korean regulators levied an $854 million fine against the company. The regulators accused Qualcomm of extracting excessive patent royalty payments from cell phone manufacturers and imposing unlawful restrictions on licensing agreements.

The FTC followed with its own enforcement action in January. Soon after that, private plaintiffs quickly began filing their own Qualcomm antitrust class action lawsuits, alleging they paid more than they should have for their smartphones and tablets as a result of the company’s anti-competitive behavior.

According to the plaintiffs, Qualcomm now controls 80 percent of the market share for modem chipsets. These chipsets are essential components for devices built to comply with a communications standard known as CDMA, the standard relied on by major communications carriers including AT&T and Verizon.

Plaintiffs accuse Qualcomm of using its market share as leverage to force manufacturers to pay exorbitantly high royalties and submit to unfair licensing terms. They allege the resulting costs get passed on to consumers in the form of higher prices for CDMA-compatible devices.

The proposed Qualcomm Antitrust MDL is In re: Qualcomm Patent Licensing Antitrust Litigation, MDL No. 2773, before the U.S. Judicial Panel on Multidistrict Litigation.

UPDATE: On Sept. 25, 2017, cell phone buyers pushed back against Qualcomm’s arguments to dismiss the antitrust litigation.

UPDATE 2: On July 19, 2018, plaintiffs in a Qualcomm antitrust class action lawsuit argued against the chipmaker’s push to require Apple to import iPhones under a proposed cease and desist order pending with the International Trade Commission.

UPDATE 3: On Aug. 9, 2018, Qualcomm fought a motion to certify a class action lawsuit initiated by consumers who say forced import behavior intentionally fixed the price of chipsets commonly used in cell phones. The chipmaker told the court that a Class of 250 million people is unprecedented and unfeasible.

UPDATE 4: On Aug. 29, 2018, a judge blocked a consumer antitrust class action lawsuit that attempted to stop Qualcomm from pursuing a patent infringement case against Apple which could force Apple to only import iPhones with Qualcomm’s chipsets.

UPDATE 5: On Sept. 27, 2018, a group of cellphone purchasers who filed a Qualcomm class action lawsuit have received certification from the court.

UPDATE 6: On Oct. 12, 2018, Qualcomm says that they should be able to appeal a California court’s decision to certify a proposed Class of 250 million individuals in a lawsuit alleging the company gouged consumers by hiking the price of a chip used in most cell phones.

UPDATE 7: On Jan. 23, 2019, consumers who purchased a cell phone since Feb. 11, 2011, may be affected by a Qualcomm antitrust class action lawsuit pending in federal court. A settlement has not been reached and no money is available at this time. However, this litigation is being dubbed “quite likely the biggest class action in history,” and may affect the rights of more than 250 million cell phone owners. Learn more here.

UPDATE 8: On Jan. 23, 2019, Qualcomm was granted an immediate appeal of a massive certified Class of cellphone owners involved in a class action lawsuit alleging the company overpriced chips ubiquitous in mobile devices. Qualcomm contends that the newly certified Class of about 250 million consumers is “simply too large and unwieldy to manage” in a petition to appeal the decision brought to the Ninth Circuit two-judge panel.