Qualcomm Class Action Lawsuit Alleges Antitrust Activity

Beleaguered mobile chip provider, Qualcomm Incorporated, was hit with yet another class action lawsuit over alleged antitrust activity.

Lead plaintiffs claim Qualcomm holds and abuses it monopolistic position in the world by charging billions in licensing for the modem chipsets it produces.

The plaintiffs contend that as a result of Qualcomm’s anticompetitive conduct, consumers pay artificially inflated prices for the products containing the chips, including cell phones and computer tablets.

“Qualcomm is an American multi-national semiconductor and telecommunications equipment company that designs and markets wireless telecommunications products and services,” says the complaint.

“Qualcomm’s anticompetitive conduct has been met with severe condemnation by regulators throughout the world,” allege the plaintiffs in their complaint. “In essence, Qualcomm has now ‘parlayed its pioneering role in cellular technology into a patent-licensing business that generates most of its profits. Qualcomm charges a royalty on nearly every smartphone made, whether or not the device uses its chips … [a]s a result, Qualcomm has reaped more than $50 billion in licensing revenues since 2000.’”

The class action claims Qualcomm has unfairly benefitted off technology, the modem chipsets, that allow different types of mobile devices to communicate with each other across different carriers, for example, between a phone using AT&T and another using Verizon.

“Qualcomm has leveraged its monopoly power over the supply of these chipsets to force device manufacturers into anticompetitive license agreements,” the Qualcomm class action states. “Since these companies need CDMA- and LTE-based chipsets (which are controlled by Qualcomm) to be able to operate with CDMA and LTE-based networks – the key to connectivity – device manufacturers have no other choice but to accept unreasonable license terms as dictated by Qualcomm.”

According to the complaint filed in Northern California federal court, Qualcomm has been in violation of the federal Sherman act, as well as state antitrust and consumer protection laws since January of 2003.

“Qualcomm’s power in the modem chipset market allows it to unfairly leverage its position to force licensees to pay inflated rates on an unreasonable rate basis, which results in an increased royalty payment that has nothing to do with the actual value attributable to Qualcomm’s technologies and intellectual property – to the harm of all purchases of Cellular Devices throughout the world,” contend the plaintiffs.

Twenty-four other class actions have been filed against Qualcomm over alleged antitrust violations. Qualcomm asked for these lawsuits to be consolidated into multidistrict litigation in February of this year. Additionally, the Federal Trade Commission filed a case against Qualcomm over the alleged antitrust activities in federal court in California.

The plaintiffs in this class action argue that their lawsuit should remain in the Northern District of California because “a substantial part of the event giving rise to these claims occurred in Santa Clara County.” They also point out that the FTC case is filed in the same court.

The plaintiffs are seeking damages, injunctive relief, and any other available remedies.

The lead plaintiffs are represented by Louise H. Renne and Steve Cikes of Renne Sloan Holtzman Sakai LLP.

This Qualcomm Antitrust Class Action Lawsuit is Renee Acosta, et. al. v. Qualcomm Incorporated, Case No. 5:17-cv-01591, in the U.S. District Court for the Northern District of California.

UPDATE: 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 2: 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 3: On Sept. 27, 2018, a group of cellphone purchasers who filed a Qualcomm class action lawsuit have received certification from the court.

UPDATE 4: 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 5: 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.