Qualcomm Faces $865 Million Fine in South Korea Antitrust Case

Qualcomm Faces $865 Million Fine in South Korea Antitrust Case

The Korea Fair Trade Commission feels that Qualcomm has violated the country's antitrust laws by limiting competing chip makers' access to its patents. Qualcomm will file its appeal once it receives the written order, but will have to pay the fine within 60 days of the receipt.

A year after getting hit with a $975 million antitrust fine in China, Qualcomm Inc.is once again on the hook over its business practices. Past year it agreed to pay a $975m fine in China following an antitrust probe, while the European Union has accused it of anticompetitive behaviour.

The Korea Fair Trade Commission (KFTC) said on Wednesday, Qualcomm licensed its key patents only to key handset makers and didn't properly negotiate the terms of its licenses.

Qualcomm made $25.1 billion in 2015 from collecting patent royalties and selling modem chips. Qualcomm has also allegedly indiscriminately scrapped mobile communication-related essential patents owned by mobile device manufacturers in return for providing them with its chip set-related licensing patents, according to the FTC. The regulator told Qualcomm it has to renegotiate agreements with handset makers if they request it, which could impact Qualcomm's agreements with Intel Corp.


But it's not just in South Korea that Qualcomm may be in trouble.

"Qualcomm strongly believes that the KFTC findings are inconsistent with the facts, disregard the economic realities of the marketplace, and misapply fundamental tenets of competition law", said Don Rosenberg, Qualcomm's executive vice president and general counsel in a statement.

Qualcomm was quick to respond to the KTFC order, calling it an "an unprecedented and unsupportable decision relating to licensing practices that have been in existence in Korea and worldwide for decades".

Qualcomm, based in San Diego, said it is planning to contest the regulator's decision rejecting a suggestion it had hindered other suppliers of chips the ability to sell. Smartphone sales also are running out of steam, forcing Qualcomm to look to other computer areas such as data centers for potential sources of growth. A problem regarding application of FTA's (Fair Trade Agreement) procedural protection measure between South Korea and the US that was presented by Qualcomm has emerged as a new issue.

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