Apple Funding Legal Defense Of Four Companies In Qualcomm Antitrust Lawsuit

Apple and component manufacturer Qualcomm are currently tussling in court and the smartphone giant doesn’t plan on backing down anytime soon. Apple is backing the legal defense for four companies involved in a countersuit from Qualcomm, according to Reuters.

The four companies in the suit — Foxconn parent company Hon Hai Precision Industry and component manufacturers Wistron Corp, Compal Electronics and Pegatron Corp — filed a complaint Tuesday accusing Qualcomm of violating U.S. antitrust law. Apple confirmed to Reuters it was helping to fund the legal defenses for all four companies.

Read: Qualcomm Lawsuit Against Apple Wants iPhone Imports And Sales To Be Halted

All four contractors were named in a May suit from Qualcomm that’s the latest chapter in a long-winding legal battle between Qualcomm and Apple. In January, Apple sued Qualcomm for around $1 billion in unpaid license rebates over internal smartphone components.

As part of this legal wrangling, Apple stopped paying license payments to Qualcomm in April and told its manufacturing partners to do the same. In May, Qualcomm brought its own suit that sought to force these contractors to begin making payments again. Earlier this month, Qualcomm also asked U.S. regulators to halt the sale and imports of iPhones.

In a statement via Reuters, Theodore Boutrous, a lawyer who represents the four named companies, said the suit from Qualcomm was strictly retaliatory and intended to be a response to Apple.

"Qualcomm has confirmed publicly that this lawsuit against our clients is intended to make a point about Apple and punish our clients for working with Apple," Boutrous said. "The companies are bringing their own claims and defenses against Qualcomm."

The lawsuit from Apple has also come alongside additional scrutiny on Qualcomm’s business model. Traditionally, Qualcomm’s revenue has relied on heavy enforcement of its own patents and licensing agreements that allow other companies to use its technology. In the past, Apple phones have used Qualcomm hardware internally for vital functions like connecting to cellular data networks. However, regulators in the U.S. and South Korea have brought suits and fines against Qualcomm alleging its business model is anticompetitive.

Read: Apple Ceases Royalty Payments Amid Lawsuits, Qualcomm Stock Price Plummets

For Qualcomm’s part, the company has previously argued that it is simply defending its contractual responsibilities and intellectual property. In past public statements, Qualcomm argued that the four suppliers named in the suit are still responsible for previous agreements and contended that Apple had used Qualcomm technology in its iPhones, but was “refusing to pay for it.”

For Qualcomm, the fight with Apple has come at a cost to its bottom line. As Reuters notes, analysts have dropped their predictions for Qualcomm’s revenue from $6 billion to $5.2 billion for the quarter. Investors have also been similarly dismal towards Qualcomm, with its stock price dropping to around $55 per share since Apple’s initial suit.