Almost precisely five years after it started, UK consumer group “Which?” has withdrawn its class action against Qualcomm based on a settlement that is more like a surrender with limited benefits.
Originally, the class action was seeking 480 million UK pounds (US$650 million) on behalf of Apple and Samsung customers, arguing they overpaid for their smartphones because Apple and Samsung paid Qualcomm too much (for chipsets and for standard-essential patent (SEP) licenses) and passed those costs on to consumers. Now, the class action website says this:
The parties have reached agreement pursuant to which the Class Representative will now apply to the [UK Competition Appeal] Tribunal for permission to withdraw the Proceedings in their entirety. Qualcomm will not make any payment to the Class Representative or the Class as a result of this agreement (which remains subject to the Tribunal’s approval). The approval of the Class Representative’s application by the Competition Appeal Tribunal will conclude the claim against Qualcomm. This agreement has been reached between the parties because the Class Representative has concluded, based on the evidence, and the arguments at trial, that the Tribunal will find that:
- Qualcomm did not coerce Apple, Apple’s Chipset Manufacturers (CMs), or Samsung to sign any patent licences or chipset agreements;
- Qualcomm did not leverage its position as a chipset supplier to coerce Apple, Apple’s CMs, or Samsung to agree to any licensing terms; and
- Qualcomm’s licensing and chipset practices did not infringe competition laws, did not result in inflated royalties, and did not lead to an increase in prices consumers paid for their mobile phones.
The term “Chipset Manufacturers” in the above statement makes no sense as Qualcomm doesn’t license baseband chipset makers. They must mean “Contract Manufacturers” (such as Foxconn). Those companies did take licenses from Qualcomm on Apple’s behalf.
Considering that there is no payout to consumers and that the announcement involves a concession of no wrongdoing, it’s a safe assumption that Qualcomm was on the winning track and would have received a favorable decision by the Competition Appeal Tribunal (webpage for the case) barring a monumental surprise. The class action could then have tried to appeal (the Competition Appeal Tribunal is just a court of first instance for such a class action, even if the name suggests otherwise). But apparently the conclusion was that they weren’t able to make their case.
The United States Federal Trade Commission won a 2019 trial against Qualcomm, but lost on appeal. A U.S. class action also went nowhere. As did antitrust complaints in different parts of the world.
Media reports quote a Qualcomm spokesperson:
“This recognition by the class representative, following a trial on the merits, reaffirms what the courts in the United States have repeatedly held: Qualcomm’s licensing practices are lawful and do not harm competition.”