American tech giant Apple has threatened to quit the UK over a US$7bil (£5bil or RM29.11bil) legal row.
Apple’s lawyers warned it could quit the UK market if a court forces the company to pay a ‘commercially unacceptable’ fee for the technology used in its iPhones.
The extraordinary threat raises the prospect of an end to new iPhone sales in the UK and the restriction of services and upgrades to existing customers.
Although Apple is highly unlikely to follow through with its ultimatum, the row is the latest sign of the escalating hostilities as British authorities try to rein in the powerful US tech giants.
Apple issued the warning as part of a court battle with UK patent holder Optis Cellular Technology.
Optis is suing Apple for patent infringement after the iPhone maker refused to pay licence fees worth a possible US$7bil (RM29.33bil) for using ‘standardised’ smartphone technology in its products. A High Court judge ruled last month that Apple had infringed two Optis patents, which help iPhones connect to the 3G and 4G networks.
Optis has brought a string of similar claims over patents for other technologies it says Apple has used.
Apple faces a trial in 2022 over how much it should pay. The UK Supreme Court ruled last year that a UK court is able to set the rate Apple should pay for all of its iPhone patents worldwide, even though the court only considers the infringement of UK patents. At a hearing in January, Justice Meade warned Apple that ‘it might be disappointed’ by the rate set by a judge.
Apple could walk away from the fees if it exits the UK market. But Justice Meade suggested this was unlikely, saying: “There is no evidence Apple is really going to say no [to paying the rate set by the judge], is there? There is no evidence it is even remotely possible Apple will leave the UK market?”
Apple’s lawyer Marie Demetriou replied: “I am not sure that is right... Apple’s position is it should indeed be able to reflect on the terms and decide whether commercially it is right to accept them or to leave the UK market. There may be terms that are set by the court which are just commercially unacceptable.”
There will be a separate court case later this month over whether Apple should make a legally-binding pledge to abide by the payout rate decided at trial in July 2022.
Apple could be banned from selling iPhones in the UK if it refuses to make undertakings to the court.
Kathleen Fox Murphy of EIP Legal, representing Optis, said: “Everyone thinks about Apple as the market leader in smartphones, but Apple has to buy in most of the technology in an iPhone.” – The Daily Mail (London)/Tribune News Service