The £480 Million Question UK Consumers Take On Tech Giant Qualcomm Over Inflated Phone Prices

Millions of UK consumers who purchased Apple and Samsung smartphones could be in line for a share of a £480 million payout following a major collective action lawsuit against US chip giant Qualcomm. The case, brought by consumer champion Which?, alleges that Qualcomm engaged in anti competitive practices for years, leading to inflated prices for millions of handsets sold across the UK. The trial, which began at the Competition Appeal Tribunal in London, is poised to be a landmark moment in consumer rights law, seeking redress for an estimated 29 million customers.

The lawsuit's core allegation centers on Qualcomm’s alleged abuse of its dominant market position in the patent licensing and chipset markets. Which? claims that Qualcomm enforced a “no licence no chips” policy, essentially forcing manufacturers like Apple and Samsung to pay inflated and unfair royalties for technology licenses even if the companies didn’t use Qualcomm’s chips in a particular device. These artificially high costs were then, Which? argues, inevitably passed on to consumers in the form of higher retail prices for their smartphones, amounting to an industry wide private tax. This practice is claimed to have breached UK competition law.

The class action covers individuals who purchased new Apple or Samsung smartphones in the UK between October 1 2015 and January 9 2024. The total amount of damages being sought is approximately £480 million. Should Which? be successful in its claim, the estimated average payout for eligible consumers is around £17 per phone, though the final amount could vary based on the specific device model and the total number of handsets purchased by an individual within the claim period. Significantly, the claim operates on an opt out basis, meaning that all affected consumers are automatically included in the legal action and do not need to take any immediate steps to register for compensation.

The legal process is scheduled to unfold in two stages. The current five week trial focuses on establishing whether Qualcomm did in fact hold and abuse a dominant market position. If the Tribunal finds in favor of the consumers, a second trial will then be held to assess the specific details of Qualcomm's conduct and to determine the final damages owed to the class. Qualcomm has consistently denied the allegations, previously stating that the claim has “no basis” and pointing to its success in having similar claims dismissed in other jurisdictions. However, consumer advocates stress that the collective action mechanism is vital for ordinary people to hold powerful multinational corporations to account, as individual consumers would find it virtually impossible to pursue damages on their own. The outcome of this high profile case will send a clear message regarding the enforcement of competition law in the technology sector.