Around 29 million Britons could be entitled to a payout after being overcharged for their smartphones, if a landmark claim by consumer champion Which? is successful.
According to Which?, consumers could be owed a collective £482.5m ($678.1m) in damages from multi billion-dollar tech giant Qualcomm (QCOM).
Which? believes Qualcomm has breached UK competition law by taking advantage of its dominance in the patent-licensing and chipset markets. The result is that it is able to charge manufacturers like Apple (APPL) and Samsung inflated fees for technology licences, which have then been passed on to consumers in the form of higher smartphone prices.
The consumer group is seeking damages for all affected Apple and Samsung smartphones purchased since 1 October 2015. It estimates that individual consumers could be due up to £30 depending on the number and type of smartphones purchased during that period, although it is expected at this stage that most consumers would receive around £17.
Which? is urging Qualcomm to settle this claim without the need for litigation by offering consumers their money back.
However, Qualcomm told Yahoo Finance UK there was no basis for a legal action. Christine Trimble, vice-president of public affairs at Qualcomm said: “There is no basis for this lawsuit. As the plaintiffs are well aware, their claims were effectively put to rest last summer by a unanimous panel of judges at the Ninth Circuit Court of Appeals in the United States.”
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Which?, however, believes its legal action could help millions of consumers get redress for Qualcomm’s anticompetitive abuse. This is possible because of the opt-out collective action regime that was introduced by the Consumer Rights Act 2015.
It has been near impossible for individual consumers to take on big companies like Qualcomm in the past, but the collective regime opened the door for Which? to represent consumers where large numbers of people have been harmed by anticompetitive conduct.
This action is vital to obtain redress for consumers and to send a clear message to powerful companies like Qualcomm, that if they engage in harmful, manipulative practices, Which? stands ready to take action.
Anabel Hoult, CEO of Which?, said: “We believe Qualcomm’s practices are anticompetitive and have so far taken around £480 million from UK consumers’ pockets – this needs to stop. We are sending a clear warning that if companies like Qualcomm indulge in manipulative practices which harm consumers, Which? is prepared to take action.
“If Qualcomm has abused its market power it must be held to account. 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.”
A similar matter has previously been brought to trial in the US. The United States Court of Appeals for the Ninth Circuit’s decision in the Federal Trade Commission case against Qualcomm found a number of actions of the business were not anticompetitive, including making exclusivity payments to Apple and refusing to license its standards essential patents (SEPs) to rival chipset manufacturers.
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