back to article Qualcomm under fire for 'anticompetitive' patent shenanigans causing pricey UK smartphones

The UK Consumer's Association has kicked off a claim against chipmaker Qualcomm, alleging that its licensing activities have resulted in UK 4G smartphone owners being overcharged. Led by Which?, the claim focuses on an alleged breach of UK competition law by Qualcomm in how much it charged poor little Apple and Samsung for the …

  1. KBeee Bronze badge
    Facepalm

    So their defence seems to be "This wasn't found to be illegal in the US, so it isn't illegal anywhere else"?

    1. Gordon 10 Silver badge

      Appears so - rather meaningless statement that one. Interesting to see how any judgement could be enforced on Qualcomm, since a ban on their chippery would be vigourously contested by Samsung and Apple.

      1. General Purpose Bronze badge

        Which aren't seeking a ban on Qualcomm's chips, they're seeking compensation. If that was awarded and Qualcomm didn't pay up, assets could be seized. Forbidding the UK import of goods containing Qualcomm products is not on the cards.

    2. short a sandwich
      Unhappy

      Not in Kansas Now Dorothy

      UK Judges are known for their tolerance of "it was found lawful in another jurisdiction' as a defence,

  2. Disgusted Of Tunbridge Wells

    I wonder rather than splitting this half a billion between the consumers and getting nothing, the government should take it and spend it all on something nice.

    Obviously you can't build a chip fab with that money, but it could be used to establish an industry that Britain doesn't have. Half a billion in zero interest loans to anybody wanting to build a chip fab in the UK might be a useful sum.

    I assume it couldn't be done in this case and would require a law change, but it would act as a future disincentive towards foreign firms engaging in such behaviour in future - the fines will be spent creating competitors.

    Chip fab was the first thing that sprang to mind of course, but it the existence of ARM in Cambridge could make it viable.

    1. Roland6 Silver badge

      >I wonder rather than splitting this half a billion between the consumers and getting nothing, the government should take it and spend it all on something nice.

      6 months of HS2 construction ?

      1. lybad

        Thought it said something nice? HS2 does nothing for anyone north of Manchester/Liverpool.

        1. Missing Semicolon Silver badge

          HS2 does nothing useful for those North of Euston Station....

          1. david bates

            Well...its saves 20 minutes from Birmingham. Which doesn't help much if the cost of a ticket remains much, much more expensive than going by car, which it will.

            Of course, if the railways had a reliable wireless service we could - I dunno - work on the train and negate those 20 minutes. Or just work from home like we're doing now...

            1. Alan Brown Silver badge

              "its saves 20 minutes from Birmingham."

              It saves more for places further away (Manchester etc)

              Of course the REAL benefit of HS2 is that it decongests the east and west mainlines and allows them to double their freight capacity. Faster passenger service is a side benefit

        2. Roland6 Silver badge

          >Thought it said something nice?

          But they only specified that the Government should spend it on something nice, which given this is the UK means whatever the politicians think is 'nice'.

          But I got my math wrong, its only 0.5 Bn, so thats only 3 months construction or circa 2.5km of trackbed at current costs.

      2. katrinab Silver badge
        Trollface

        An under-water roundabout round the Isle of Man?

      3. Alan Brown Silver badge

        2% of track and trace?

    2. General Purpose Bronze badge

      Governments often do seize people's money, true, but depriving them of court-awarded compensation would be an awful step. ("Yes, you've been awarded £500,000 for injury suffered by medical malpractice but we think we'd rather spend that on the NHS - my mate in the pub could sell the NHS a lot of dodgy PPE for that.")

      1. Disgusted Of Tunbridge Wells

        I'm not talking about individual lawsuits, but these massive class action things that end up paying up 10p/victim.

        Leave your nonsense about the government rushing to acquire PPE out of it please.

        1. General Purpose Bronze badge

          10p/victim? You proposed taking £0.5bn of other people's money and using it for "zero interest loans to anybody wanting to build a chip fab in the UK".

          1. Disgusted Of Tunbridge Wells

            The money would be spread so thin it would be pointless.

            I'm saying it could build for the future. And chip fab was an example.

            Seriously, can people not read? Disagree with me sure, but read the bloody thing if you're going to.

            1. General Purpose Bronze badge

              We have read it, and your follow-up. As your talk of £0.5bn in zero-interest loans shows, you're basing your rhetoric of "spread so thin it would be pointless" and "10p/victim" on a miscalculation by two or three orders of magnitude. 10p for every adult and child in the UK is less than £7m.

              For that, you propose to change the law so that court-ordered compensation is paid to the government, not the people bringing the lawsuit or joined in it, which is a horrifying extension of state power and at a stroke, cancels all chances of a company facing a class action suit in the UK ever again, no matter how much harm they've caused.

              You're proposing giving that power to future governments, Tory, Labour, or looney, to be extended by reducing this treshold or that in future Budgets.

              You're proposing an innovation which no monarch, emperor or government anywhere has dared.

              And you call it building for the future.

              1. Disgusted Of Tunbridge Wells

                >We have read it, and your follow-up. As your talk of £0.5bn in zero-interest loans shows, you're basing your rhetoric of "spread so thin it would be pointless" and "10p/victim" on a miscalculation by two or three orders of magnitude. 10p for every adult and child in the UK is less than £7m.

                No "miscalculation" I was exaggerating to emphasise my point. We've all read the article, so we know what the actual figure is.

                > For that, you propose to change the law so that court-ordered compensation is paid to the government, not the people bringing the lawsuit or joined in it, which is a horrifying extension of state power and at a stroke, cancels all chances of a company facing a class action suit in the UK ever again, no matter how much harm they've caused.

                That's a fair point. An actually worthwhile comment. I don't know if there's an answer to that.

                > You're proposing giving that power to future governments, Tory, Labour, or looney, to be extended by reducing this treshold or that in future Budgets.

                I was thinking of limiting it specifically to large scale class action suits that would pay out a vanishingly small amount ( £50 is less than 1/10th the cost that the claimants spent on the phone in the first place ).

                > You're proposing an innovation which no monarch, emperor or government anywhere has dared. And you call it building for the future.

                A quite limited one which would, in theory, benefit the consumer more than the payout of a few pounds. If any company behaved badly enough to be subject to this sort of class action suit it would be creating competitors for itself. Also high skill jobs in this country. It could be a net benefit.

                Of course you correctly point out that the whole point is moot because of the lack of motivation for a class action suit should there be no profit. There may be an answer to this but not one I can think of.

        2. Citizen of Nowhere

          You are the one proposing giving money to the government. General Purpose has every right to refer to their previously observed behaviour when spending other people's money. Haste is no more an excuse for incompetence and breaking the law than is ignorance.

      2. Anonymous Coward
        Anonymous Coward

        Government taking your compensation

        Victims of wrongful conviction and imprisonment used to fall foul of this. The (England & Wales) legal system would deduct the cost of paying for their incarceration from any compensation settlement. I don't know if they still do this (or what happens in Scotland or Northern Ireland).

    3. iron Silver badge

      Dominic Cumming's pals don't need half a billion quid thanks.

      What makes you think they would spend it on something nice? Much more likely to hand it to Peter Thiel and his degenerate data hoarders at Palantir.

      1. Anonymous Coward
        Anonymous Coward

        >>>degenerate data hoarders at Palantir

        Data Nonces?

    4. Ol'Peculier

      Been there...

      That's what happened here. When our telephone exchange burnt down BT said rather than pay everybody a fairly derisory amount, we'll give the council £500K and the ratepayers can decide what to do with it.

      It was donated to a theatre which was taking over and repurposing an Odeon cinema - what is now the marvellous Stephen Joseph Theatre in the Round - where all of Alan Ayckbourn's plays are given their worldwide premier.

      1. david bates

        Re: Been there...

        As someone with little interest in theatre and less in Ayckbourn that sounds like an appalling waste of money to me.

        I have no doubt Ayckbourn could easily have chucked 500k at the theatre without missing it and the money could have been spent on a project that helped the wider community, rather than a subset with the time, money and inclination to go and see some rather dull plays.

        1. hoola Silver badge

          Re: Been there...

          You are never going to appeal to everyone but with many of these class law suits, the only real winners are the various legal teams. Distributing the compensation is hugely wasteful and to most people the amount is completely meaningless. Listen to the adverts for the Mercedes emissions action, "you may be entitled to thousands of pounds".

          Does anyone actually believe that?

          In the BT case it went to a theatre, it could easily have been used to support local sports facilities or improve open spaces. There is far too much of the "I don't benefit from this so nobody should have it"

          There is no right answer but these huge class actions actually have no tangible benefit for the people who have been told be an activist group that will receive compensation. In reality most people have their phones on contract and the £30 over 3 years is nothing.

        2. Ol'Peculier

          Re: Been there...

          The premiers ensure that the theatre critics have to get their passports out and travel north of Watford, which is always amusing, plus the they have a big outreach programme which benefits kids and young adults from all around the area.

          And as for waste of money, this is the same council that a couple of years ago decided that demolishing the fifth largest theatre outside London, at a cost of over £4 million, was a good idea...

    5. Anonymous Coward
      Anonymous Coward

      Disgusted Of Tunbridge Wells "Half a billion in zero interest loans to anybody wanting to build a chip fab in the UK might be a useful sum."

      Too young to remember Siemens' Tyneside fab?

      1. Disgusted Of Tunbridge Wells

        I am, but as I said in my post, chip fab was only an example of an industry that half a billion could help establish.

      2. Slef

        Or Hyundai's white elephant fab in Fife !

    6. Anonymous Coward
      Anonymous Coward

      Half a billion on chips?

      Half a billion wouldn't make much of a dent in the cost of a modern fab. It might pay for the airconditioning I suppose.

      Of course, it could go on compensating the UK shellfish industry (worth £393M in 2019 according to this: https://www.bbc.co.uk/news/uk-politics-55903599). Unfortunately most of it went to the EU (up to 90% apparently - https://www.bbc.co.uk/news/uk-wales-politics-55631622), and now can't due to import restrictions. The news has made quite the stir in some parts of the country.

      1. Disgusted Of Tunbridge Wells

        Re: Half a billion on chips?

        If memory serves, a modern fab is something like $4bn. £500 in interest free loans might be a helpful sum.

        Although as I said, chip fab was just an example.

        How about not banging on about the EU in an unrelated article, you obsessive?

        1. Anonymous Coward
          Anonymous Coward

          Re: Half a billion on chips?

          If you just wanted an example, then why not compare £500M to the UK Research Councils' budgets. According to Wikipedia EPSRC's 2015-16 budget was £898M. BBSRC's was £498M. STFC's was $529M. (AHRC's was £102M in case you're wondering about the arts-science divide.)

          In addition, the EPSRC page on Wikipedia states "In 2020, ESPRC received £22 million from UKRI to be used (alongside money from industry and the universities involved) to fund five "next stage digital economy" centres. Projects will be run by the universities of Bath, Newcastle, Northumbria, Nottingham, Surrey and Lancaster." £22M for five centres.

          But your example was about putting £500M towards a chip fab. On this very site, article

          https://www.theregister.com/2021/02/25/biden_chip_shortage_pledge/

          notes that President Biden is aiming for $37Billion for the US semiconductor industry. £0.5Billion would do nothing to develop a UK semiconductor industry. So why bang on about a chip fab, when the money would be wasted?

          1. Disgusted Of Tunbridge Wells

            Re: Half a billion on chips?

            As I said, a chip fab was the thing that that came to mind. I wasn't married to the idea - it was just a suggestion.

            The amount being paid to individual consumers is very small. The amount paid to government would be very small ( a tiny fraction of the budget ) and so pointless.

            However my point is that maybe there's a middle ground of contributing towards something very specific where the money would make a big difference to a project.

            Somebody else has pointed out that without the payout there would be no motivation for a class action to be ever brought, which does scupper the whole idea. It was just a thought.

      2. Alan Brown Silver badge

        Re: Half a billion on chips?

        "Of course, it could go on compensating the UK shellfish industry "

        That's chickenfeed compared to the losses in the UK entertainment industry (about ten times higher and mounting) thanks to ideological extremism about working visas resulting in the EU not granting reciprocal access

    7. Grease Monkey Silver badge

      "I wonder rather than splitting this half a billion between the consumers and getting nothing, the government should take it and spend it all on something nice."

      Sorry but that makes no sense. The lawsuit argues consumers have been overcharged and you think the logical response to that is to give the treasury the money? So what you've basically just advocated is a tax on smartphones that buyers didn't even know they were paying.

      How long have you been a Tory MP?

      1. Disgusted Of Tunbridge Wells

        No, specifically not the treasury. Spent on a specific project or scheme so that the money would directly do more good.

        When the payout is a fraction of the purchase price of the consumer item, unless it's a house or a car, it's hardly worth it to the consumer.

        If you can spend £1k on a phone, you aren't going to really gain anything by being given £50.

        1. Alan Brown Silver badge

          "If you can spend £1k on a phone, you aren't going to really gain anything by being given £50."

          if it results in a £150 phone now selling for £100, that's a net benefit for a lot of people - and this is the more likely outcome when the dust settles

          Qualcomm's rent-seeking licensing behaviour has a disproportionate effect on the pricing of devices as they head down the market

          It'll be interesting to see what the ACCC does, as they've been stomping all over this behaviour recently

    8. Anonymous Coward
      Anonymous Coward

      >>> Chip fab was the first thing that sprang to mind of course, but it the existence of ARM in Cambridge could make it viable.

      You don't need a silicon IP vendor on your doorstep to build a semiconductor fab. Making ASICs is not part of their business. But as others have pointed out we did have fabs in this country. Including ones the government paid handsome subsidies for. They are all gone now. The boat sailed a long time ago. The UK will probably not be seeing any investment in microelectronics again.

  3. Natalie Gritpants Jr Silver badge

    I have a drawer full of old Sammies, do I get money back for each one. Ebay is full of really cheap old phones that might cost less than the compo.

  4. Doctor Syntax Silver badge

    "The Which? action does therefore carry a slight whiff of piggybacking about it"

    Given that we can no longer benefit directly from any EU action and probably HMG isn't going to have the resources to take actions that the US or EU has then it's difficult to see how there could be an alternative.

  5. iron Silver badge

    Doesn't Samsung use their own Exynos chips in the UK? I thought they only use Qualcomm in the US.

    1. lybad

      I think they do some phones with Snapdragons - just want to know why just them? Aren't Nokia/HMD, Xiaomi, Huawei (I know some don't use the Kirin) and Google amongst others using the same chips? Or is it a scale of sale thing?

    2. katrinab Silver badge

      This is about modem chips, not CPU chips. Apple use their own CPUs, but Qualcomm modems in their latest phones.

    3. ctr00001

      Correct ror their flagships. A mixture of MTK, Qualcomm and Unisoc/Spreadtrumfir the others . And Apple used Intel modems up until a couple of years ago

    4. Alan Brown Silver badge

      "Doesn't Samsung use their own Exynos chips in the UK"

      Some of them, but the 5G stuff (modems, etc) is separate from the Snapdragon

  6. David Nash

    Overpriced phone?

    While it's nice to try to compensate the consumer for overcharging, does anyone think that an iphone would have been £30 cheaper without this issue? They are priced at a specific point decided by marketing, eg. if they want to sell it at £500 they won't be selling it at £470 just because the chips were a bit cheaper.

    1. Brewster's Angle Grinder Silver badge

      Re: Overpriced phone?

      That's what's nice about this - we get cash that otherwise would have gone to Tim Cook's bonus.

  7. Pascal Monett Silver badge

    "higher smartphone prices"

    Oh, because you want me to believe that Apple would have sold its flagship phone at $500 if Qualcomm hadn't been there ?

    Pull the other one.

    1. DS999

      Re: "higher smartphone prices"

      That's the beauty of their lawsuit, it doesn't matter whether that's true or not. They are asking for what they say Qualcomm overcharged to be returned directly to consumers who bought Apple and Samsung phones, not to Apple and Samsung.

      So the consumers actually win if this case succeeds - not sure how many phones are affected so that half a billion may not amount to very much especially when the lawyers take their cut but a check for a fiver is better than nothing if all you have to do to take part is fill out a web form.

  8. martinusher Silver badge

    The other problem with Huawei

    Is that their 5G solution doesn't involve putting these 4G modem chips in their phones.

    Now does all this 'security' stuff start making sense?

  9. Anonymous Coward
    Anonymous Coward

    "As the plaintiffs are well aware, their claims were effectively put to rest in the United States only last summer by a unanimous panel of judges at the Ninth Circuit Court of Appeals in the United States."

    There Qualcomm, fixed that for you :p

  10. Anonymous Coward
    Anonymous Coward

    Qualcomm has had these business practices since the 90's when CDMA was first commercially released. In the beginning they were the only ones that sold the chipsets for the phones. They also made phones and many manufacturers quickly found out that Qualcomm charged a lot for the chipsets, to the point where a Qualcomm manufactured phone would be far cheaper than what the competition could sell a phone for. Eventually they sold the phone division off and just kept the chipset side.

    https://www.qualcomm.com/news/releases/2000/02/22/qualcomm-and-kyocera-close-agreement-terrestrial-cdma-phone-business

    Then not long after, the carriers were running into Qualcomm issues in that Qualcomm was trying to keep all other vendors from making compatible equipment. Eventually Qualcomm decided to also exit that businessL

    http://www.cdg.org/news/may_99.asp#ericcson5_25

    Qualcomm also was pushing their 3G technology but CDMA (W-CDMA) was developed and Qualcomm did absolutely nothing in the development of it, they always made sure they collected their royalties though.

    Qualcomm has a long history of the same business tactics over and over again. Why any standards body would even allow them to participate is beyond me. If they don't want to license their technology, then exclude them from future standards and let their business shrink year over year until they no longer exist.

    1. NeilPost Silver badge

      If these questionable ‘licensing practices’ have grabbed Which?’s attention perhaps if successful they can move on to the Soprano’s of the Database world ... in Oracle.

      1. hoola Silver badge

        Which could not give a stuff about Oracle as it is not used by consumers. Or more correctly consumers do not pay Oracle anything directly.

    2. genghis_uk Silver badge

      I was going to say the same - Qualcom have a long history of this.

      It's partly why US phones lagged far behind Europe in the late 90s and early 2000's.

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