It’s rarely the case that consumers get good news around the money they pay for their smartphones; however, a jaw-dropping 29 million UK smartphone users could be entitled to a payout from chipmaker Qualcomm, should a compensation claim filed by Which? be upheld in the courts.
That’s right: Qualcomm, the very same chip maker straining under the pressure of meeting the demand for its technology that could lead to Android phone shortages, is being hit by the civil dispute, which alleges that it owes damages to the tune of £482 million.
Qualcomm, which is a veteran of the chip-making industry, is already dealing with surging demand for its components in the Xbox Series X, PS5, and Xbox Series S. All of which rely on AMD’s SoCs to deliver the next-gen gaming experience. The last thing it needs is a court case landing at its feet, but the alleged inflation of costs to consumers is so substantial that litigation is going ahead.
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The dispute centers on the chip manufacturer breaching UK competition law by monopolizing chipset manufacturing, driving prices up on its patent-licensed technology.
Namely, the complaint focuses on two of Qualcomm’s practices that are alleged to breach competition law: its refusal to cross-license its patents to other manufacturers, which puts a stranglehold on mobile chip supply; furthermore, refusing to supply chipsets to smartphone companies, unless substantial royalties are paid.
You may feel little to no sympathy for the likes of Samsung and Apple, but it ultimately results in these companies paying over the odds, forced to cough up vastly inflated sums for technology licenses. Of course, this eventually trickles down to the little consumer who pays more for smartphones. It means that you could've paid more on any model from our best iPhones, best Android phone, or best cheap phones list.
Which? estimates consumers could be owed up to a maximum of $42/£30/AU$53, but $24/£17/AU$30 is the more likely payout that the majority of users would see. Which?'s claim could cover consumers who bought Apple and Samsung smartphones, either straight from a network operator or separate smartphone retailer, starting from October 2015. This could cover the likes of the iPhone 12 models, including the iPhone 12 Pro and iPhone 12 Pro Max.
As with all these types of claims, there is no concrete guarantee that compensation will be paid – the Competition Appeal Tribunal will hear the case in its first-round unless Qualcomm opts for an immediate out-of-court settlement. Stay tuned for more information.