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19 July 2017

It turns out Apple is funding a legal battle against a rival

This dude is not messing around.
This dude is not messing around.

Image: JIM WATSON/Getty Images

Suits, countersuits, and everything in between. When Apple and billions of dollars are involved, you know things are going to get messy. 

Well, messy and interesting. Because, in what can only be read as a “don’t mess with us” play from Apple CEO Tim Cook, it turns out that the Cupertino-based behemoth is financially backing the legal defense of four iPhone manufacturers in their battle with Qualcomm — a company that just so happens to own the chip technology that allows iPhones to connect to cell data networks. 

And while at first glance this may look like a Peter Thiel-esque legal battle by proxy, Apple’s motivation appears to be mostly business (and probably only partly personal). 

Here’s what’s going down: As Reuters reports, on July 18, Wistron Corp, Compal Electronics Inc, Pegatron Corp, and Foxconn’s parent Hon Hai Precision Industry Co all claimed antitrust violations by Qualcomm. Specifically, the companies allege Qualcomm violated the Sherman Act — an 1890 U.S. federal law “aimed at preserving free and unfettered competition as the rule of trade.”

But this move didn’t come out of thin air. Rather, it stems from an ongoing legal dispute between Apple and Qualcomm. Apple sued the company in January over unpaid patent license rebates, claiming Qualcomm owed it close to $1 billion, and told the aforementioned iPhone manufacturers to cease license payments to Qualcomm while everything got worked out in court. 

Qualcomm then sued them all. But, with a little help from Apple, they’re not taking it lying down. 

A Pegatron building in Shanghai, China.

A Pegatron building in Shanghai, China.

“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,” lawyer Theodore J. Boutrous, who is working with the four manufacturers, said in a statement picked up by Reuters. “The companies are bringing their own claims and defenses against Qualcomm.”

It’s not exactly clear when Apple, apparently not one to shy away from a fight, stepped in — but stepped in it has. A company spokesperson confirmed to the wire service that it’s throwing down cash for the four manufacturers’ legal tussle. With somewhere in the neighborhood of $250 billion in cash reserves, you better believe that Apple can afford it. 

So, to recap: Apple is suing Qualcomm, Qualcomm is suing four iPhone manufacturers, and Apple is at least partially funding their defense. 

Like we said, messy. One takeaway, however, is crystal clear: If you come at Apple, you’d better not miss. Apple has cash to burn, and it’s clearly not afraid to light some of it on fire. 

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