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 …
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.
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...
>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.
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.")
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.
>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.
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).
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.
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.
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.
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...
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.
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?
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.
"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
"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?
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.
"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
>>> 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.
"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.
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.
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.
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.
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