Competition tribunal against tech giant Qualcomm opens

A class action against technology giant Qualcomm that, if successful, could result in payouts for UK smartphone users has opened in the UK.

Consumer group Which? has brought the claim on behalf of around 29 million UK Apple and Samsung smartphone users.

It will focus on whether Qualcomm held market power and, if so, whether it abused its position as a dominant company.

The trial, which will run for five weeks at the Competition Appeal Tribunal in London, opened with submissions on behalf of Which?

Philip Moser KC, for Which?, told the hearing: “The nature of the abuse, where the abuse manifests itself, is in the area of negotiation of the royalty.

“And Qualcomm, instead of competitive negotiation, uses the inherent risk, or sometimes explicitly stated threat, of chipset supply disruption, software delay, to foreclose a normal discussion of royalties, and conditions for the licenses.

“Instead, it’s ‘unless you take our package of licences at Qualcomm’s rate and on our terms, unless you do that there are no chips’.

“And Qualcomm’s terms include a royalty at a rate which we say is likely to be inflated. And that’s payable on every phone whether it uses Qualcomm’s chips or not.”

If Which?’s first trial is successful, there will then be a second trial focusing on Qualcomm’s conduct and the damage suffered by the class, that Which? has calculated at around £480 million.

Which? alleges Qualcomm breached UK competition law by taking advantage of its dominance in the patent-licensing and chipset markets.

It claims that this resulted in Qualcomm being able to charge manufacturers such as Apple and Samsung inflated fees for technology licences, which have then been passed on to consumers in the form of higher prices or lower-quality smartphones.

Which? is seeking damages for all affected Apple and Samsung smartphones purchased between October 1 2015 and January 9 2024.

It estimates that individual consumers could be due an average of around £17 per phone if the action is successful.

Which? said the action was “vital” to obtain redress for consumers and to “send a clear message to powerful companies like Qualcomm that if they engage in harmful, anticompetitive practices, Which? stands ready to take action”.

Which? chief executive Anabel Hoult said: “This trial is a huge moment. It shows how the power of consumers – backed by Which? – can be used to hold the biggest companies to account if they abuse their dominant position.

“Without Which? bringing this claim on behalf of millions of affected UK consumers, it would simply not be realistic for people to seek damages from the company on an individual basis – that’s why it’s so important that consumers can come together and claim the redress they are entitled to.”

Qualcomm is expected to make its opening submissions on Tuesday.