Qualcomm Says Class Certification in Price-Fixing Lawsuit is Unfeasible

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Qualcomm is fighting 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.

Qualcomm also argues that the consumers who started the lawsuit have not shown that the price of phones went up.

The plaintiffs who filed the Qualcomm price-fixing class action lawsuit requested certification of almost all people in the U.S. who bought a smartphone in the last seven years.

This is not the first type of antitrust claim facing the company. Countries around the world have stepped in to allege violations of regulations and antitrust laws, and the lead plaintiffs in this class action have made similar claims.

The underlying element in the Qualcomm class action lawsuit says that consumers have had to pay too much for tablets and smartphones containing Qualcomm chips. The claims are currently brought together under multidistrict litigation.

According to the plaintiffs’ allegations, Qualcomm’s 80 percent market share for the chip technology has made it easier for the company to force makers of cell phones who rely on those components to pay more for the needed parts. The phone companies, according to the lawsuits, have passed on those extra costs to consumers.

The Qualcomm class action lawsuit was first filed after a regulatory action in Korea hit the chipmaker. In that country, Qualcomm is accused of using unlawful licensing contracts and charging costly royalty payments. Ultimately, a fine of $854 million was assessed.

Qualcomm also recently signed a multi-million dollar settlement in Taiwan regarding antitrust regulation issues and has been fined over $1 billion by EU antitrust authorities.

Some research has already revealed, according to the plaintiffs in the consolidated lawsuit, that Qualcomm is facing competition with Intel which might lead to higher quality and cheaper cell phone chips that would benefit consumers.

Qualcomm argues that consumers in the U.S. won’t be harmed if phones with the Intel chips aren’t allowed into the U.S. for sale.

Qualcomm argues that Class certification would allow for an extremely complex case with millions of potential members and says that this would open the door for other claims related to how cellphone manufacturers translate cost increases to consumers.

The lead plaintiffs are represented by Kalpana Srinivasan, Marc M. Seltzer, Steven G. Sklaver, Amanda K. Bonn, Oleg Elkhunovich, Krysta Kauble Pachman and Joseph Grinstein of Susman Godfrey LLP, Joseph W. Cotchett, Adam J. Zapala, Brian Danitz, Mark F. Ram and Michael A. Montaño of Cotchett Pitre & McCarthy LLP and Steve W. Berman, Jeffrey D. Friedman and Rio S. Pierce of Hagens Berman Sobol Shapiro LLP.

The Qualcomm Antitrust Class Action Lawsuit is In re: Qualcomm Patent Licensing Antitrust Litigation, Case No. 5:17­-md­-02773, in the U.S. District Court for the Northern District of California.

UPDATE: 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 2: On Sept. 27, 2018, a group of cellphone purchasers who filed a Qualcomm class action lawsuit have received certification from the court.

UPDATE 3: 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 4: 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 5: 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.