Why 4G Smartphone Users in UK Might Receive £482.5 Mn In Payout from Qualcomm

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Summary

• Consumer rights body Which? filed a lawsuit against tech giant Qualcomm accusing it of breach of anti-competitive laws.
• If Which? wins, smartphone users may collectively receive £482.5 million as damages

If consumer rights body Which? has its way, 29 million smartphone users in Britain might receive £482.5 million as damages from US tech giant Qualcomm. Which? Has filed a lawsuit against Qualcomm for skirting UK’s competition laws by taking advantage of its position as the #1 in the patent licensing and chip markets.

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Smartphone users may receive compensation worth up to £30 each, depending on the type of smartphone they use, if Which? wins the lawsuit. The rights body claimed that Qualcomm charged manufacturers like Apple Inc and Samsung Electronics higher charges for technology licenses, which were also passed on to the end-consumer as higher product price.

Which? has said that Qualcomm does not license its patents and does not provide chipsets to smartphone manufacturers without those companies paying a huge sum in royalties to Qualcomm to get a separate license.

Consumers v/s corporates

Which? is seeking compensation for smartphones purchased since October 2015. The body has asked Qualcomm to settle the issue outside the court by paying back the consumers.

Qualcomm has, however, said that these charges have already been quashed last year by a panel of judges in the United States Court of Appeals for the Ninth Circuit. In a Federal Trade Commission case against the tech giant, it was found that several of Qualcomm’s business did not breach competition laws. Which?’s claim has been filed at the Competition Appeal Tribunal, which would decide if the claim can be pursued further.

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Anabel Hoult, CEO of Which? said that the body believed that Qualcomm breached competition laws resulting in consumers overpaying around £480 million. Hoult said that the lawsuit would serve as a warning to companies like Qualcomm that if they manipulate customers, consumers’ body like Which? can take action.

The Consumer Rights Act 2015 introduced the opt-out collective action rule. Collective proceedings represent claims taken up by a representative body on behalf of a specific group of people who have been impacted by breaching of competition laws. Which? believes that this could enable several consumers to seek legal compensation against big companies that would otherwise not be possible.

Qualcomm has been previously found guilty of anti-competitive practices, resulting in huge fines. The company was fined £861 million in 2018 by the European Commission for charges that the company abused its position by paying a customer to not buy supplies from Qualcomm’s competitors.

The commission asked the company to pay £209 million after it was found that the company sold 3G chips at a cheaper price to put a competitor out of business.