Apple Inc is being fined US$25,000 per day for missing a court-imposed deadline to produce evidence in a government lawsuit that alleges mobile chip supplier Qualcomm Inc has been imposing unfair licensing terms on the makers of smartphones.
The fine imposed on Thursday by a federal magistrate judge in San Jose, California, is retroactive to Dec. 16 and is to remain in effect until Dec. 29. If Apple has not produced all 1.3 million documents covered by an order issued in October, US Magistrate Judge Nathanael Cousins intends to increase the fine.
In a statement, Apple said it plans to appeal Cousins’ ruling in a case pitting the US Federal Trade Commission (FTC) against Qualcomm, whose technology is used in most of the world’s smartphones.
“We have already produced millions of documents for this case and are working hard to deliver the millions more that have been requested in an unprecedented time frame,” said Apple, which is based in Cupertino, California.
San Diego-based Qualcomm declined comment.
The company is seeking Apple’s documents as part of its effort to prove the FTC’s allegations are wrong.
Apple sued Qualcomm in a different lawsuit shortly after the FTC lodged its complaint. Apple is accusing Qualcomm of abusing its power to extort royalties from iPhone innovations that have nothing to do with its technology. Qualcomm has denied those allegations and is countersuing Apple, raising the rancor between the two companies.
Even if Apple is fined the maximum amount of US$350,000 through Dec. 29 under the court ruling, it is unlikely to faze the company, which has about US$270 billion in cash.
Separately, iPhone owners from several US states sued Apple for not disclosing sooner that it issued software updates deliberately slowing older-model phones so that aging batteries lasted longer, saying that Apple’s silence led them to wrongly conclude that their only option was to buy newer, pricier iPhones.
The allegations were on Thursday filed in a lawsuit in Chicago federal court on behalf of five iPhone owners from Illinois, Ohio, Indiana and North Carolina, all of whom say they never would have bought new iPhones had Apple told them that simply replacing the batteries would have sped up their old ones. The suit alleges that Apple violated consumer fraud laws.
A similar lawsuit was on Thursday filed in Los Angeles. Both suits came a day after Apple confirmed what high-tech sleuths outside the company had already observed: The company had deployed software to slow some phones.
Apple said it was intended as a fix to deal with degraded lithium-ion batteries that could otherwise suddenly die.
The Chicago lawsuit suggests Apple’s motive might have been sinister, although it offers no evidence in the filing.
“Apple’s decision to purposefully ... throttle down these devices,” it says, “was undertaken to fraudulently induce consumers to purchase the latest” iPhone.
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