UK smartphone owners may be owed a staggering £482.5 million in damages from Qualcomm, one of the largest smartphone chip makers in the world – according to a legal claim filed by consumer advisory service Which?.
According to Which?, Qualcomm is anticompetitive. Its practices breach UK competition law as set out in the Consumer Rights Act 2015.
Which? claims the multi-billion dollar chipmaker uses its market dominance to charge phone manufacturers like Apple and Samsung unreasonably high fees for using its technology.
Which? says Qualcomm not only denies competing chipmakers licenses to its patents but also refuses phone manufacturers from using its chips unless they buy licenses and pay large royalties.
These expenses allegedly inflate manufacturing costs – a price that's ultimately paid by the consumer.
The projected class-action lawsuit, if successful, could earn every UK consumer affected anywhere from £5 to £30. The amount each customer receives depends on how many phones were purchased from 1 October 2015. The claim automatically includes customers who bought specific Apple and Samsung phones since that date.
"We are sending a clear warning that if companies like Qualcomm indulge in manipulative practices which harm consumers, Which? is prepared to take action," said Anabel Hoult, CEO of Which? in a statement to the press.
But whether Which? is likely to succeed remains questionable. Last year, Qualcomm dealt with a similar legal dispute in the US against the Federal Trade Commission, where it appealed the district court's rulings and won.
In a comment to Tech Advisor, Qualcomm's VP of Public Affairs Christine Trimble stated: “There is no basis for this lawsuit. As the plaintiffs are well aware, their claims were effectively put to rest last summer by a unanimous panel of judges at the Ninth Circuit Court of Appeals in the United States.”
The Ninth Circuit decided Qualcomm did not act anti-competitively. In the UK, Which? must first get permission from the Competition Appeal Tribunal to act as a class action representative. It then has to win for customers to potentially see the payout – unless a settlement is reached with Qualcomm first.