U.S. chipmaker Qualcomm has gone on trial in London to defend itself against a £480 million ($646.8 million) class-action lawsuit accusing it of abusing its dominant market position to overcharge smartphone makers Apple and Samsung, ultimately inflating the cost of millions of devices sold to consumers.
The case, brought by Which?, one of Britain’s leading consumer advocacy groups, alleges that Qualcomm’s licensing practices forced smartphone manufacturers to pay inflated royalties — even for devices that did not use its chips — under what the group described as a “no license, no chips” policy.
Lawyers representing Which? told the Competition Appeal Tribunal that Qualcomm’s licensing terms effectively functioned as an “industry-wide private tax” that enriched the chipmaker while driving up retail prices for consumers. They estimate that around 29 million Britons who purchased iPhones or Samsung Galaxy devices since 2015 may be entitled to compensation if the case succeeds.
The Core of the Dispute
At the heart of the case is Qualcomm’s licensing model for its standard essential patents (SEPs) — intellectual property that covers technology crucial to mobile communications standards, such as 4G and 5G. The company requires device manufacturers to obtain licenses for these patents before they can buy Qualcomm chipsets.
Which? argues that this policy gives Qualcomm excessive leverage over manufacturers, allowing it to collect royalties even when its chips are not used in a device. Lawyers for the group said this practice distorted competition and violated British and European competition laws.
“This operates as an industry-wide private tax which ensures higher profits for Qualcomm and inflates the cost of devices,” Which?’s legal team stated in documents filed with the tribunal ahead of the five-week trial.
Qualcomm’s legal team has rejected the accusations, calling them a mischaracterisation of the company’s long-standing licensing approach. The firm insists that its patent portfolio is essential to the functioning of global mobile standards and that it is legally entitled to collect royalties from any manufacturer that implements its patented technologies.
The company also pushed back against the notion that it holds unfair bargaining power, pointing out that Apple and Samsung are industry giants with considerable influence and the capacity to negotiate competitive licensing terms.
“Apple and Samsung can and do exert enormous buyer power,” Qualcomm’s lawyers said, arguing that the claims of abuse overlook the complex commercial dynamics of the smartphone industry.
The Legal Backdrop
The case before the London tribunal will first determine whether Qualcomm is liable to the claimant class. If Which? prevails, a second trial will then decide the level of damages to be awarded to affected consumers.
This is not the first time Qualcomm has faced scrutiny over its licensing practices. The company has been the target of multiple antitrust investigations and lawsuits around the world, including in the United States, South Korea, and the European Union.
A similar consumer lawsuit in California, which challenged Qualcomm’s exclusive-dealing and patent licensing agreements with Apple and other manufacturers, was dismissed in 2023. However, European regulators have previously fined the company for anti-competitive conduct, including a €997 million penalty in 2018 for payments made to Apple to exclusively use its chips in iPhones — though that decision was later annulled on appeal.
The London trial underscores the growing global debate over how much control technology patent holders should have over downstream industries, particularly when their technologies become integral to global standards.
Consumer rights advocates argue that companies like Qualcomm use their patent dominance to extract unfair royalties, while the chipmaker maintains that its licensing model is vital to funding research and development in wireless innovation.
If the court rules against Qualcomm, it could open the door to similar consumer actions in other jurisdictions and force major revisions to the way patent royalties are structured in the mobile industry.
