Qualcomm Claims Apple Made Threats and Lied to Regulators

Qualcomm accused Apple of lying to regulators to spur investigations of the chipmaker, and threatening it to cover up the use of inferior parts in some iPhones, according to Bloomberg.

The world’s largest maker of phone semiconductors responded to a January lawsuit from Apple with counterclaims for damages, alleging the iPhone maker breached contractual pledges, mischaracterized their agreements and misrepresented facts. “We were really stunned by some of the things that they included in their suit,“ said Qualcomm General Counsel Don Rosenberg. “This is our attempt to respond to some disturbing elements in their complaint.“

At the heart of the worsening standoff is a commercial dispute over how much Qualcomm is entitled to charge phone makers to use its patented technology, whether or not they use its chips. The company gets the majority of its profit from licensing technology that covers the fundamentals of all modern mobile phone systems. Qualcomm shares are down 12 percent since Apple sued Jan. 20, wiping more than $10 billion off the chipmaker’s market value.

Apple spokesman Josh Rosenstock declined to comment on the filing, saying the company’s lawsuit explains its position on the matter. “We are extremely disappointed in the way Qualcomm is conducting its business with us and unfortunately after years of disagreement over what constitutes a fair and reasonable royalty we have no choice left but to turn to the courts,“ Apple said in a Jan. 20 statement.

Apple is alone among major handset makers in not paying Qualcomm directly and has instead paid through contract manufacturers in Asia who build the iPhone. It’s now meddling in the legal agreements Qualcomm has with those suppliers, including Foxconn as it pressures the chipmaker to cut a more favorable deal on licensing fees, Rosenberg said.

Qualcomm says Apple has soured a decade worth of working together and has threatened them to try to prevent it from publicly speaking about the performance of the iPhone 7. Some models of that device rely on Intel modems for their connections to phone networks and, according to Qualcomm, aren’t as good as the ones that use its modems.