Qualcomm challenges South Korean fine for hindering competition
The South Korean competition authority SKFTC fined Qualcomm 1.03 trillion won, currently about 815 million euros. The chipmaker will be fined for obstructing competition and violating patent regulations. Qualcomm is challenging the fine.
According to the SKFTC, US Qualcomm is violating patent regulations by licensing patents under bad terms. The South Korean competition authority also states that Qualcomm forces manufacturers to purchase licenses if they use certain chips. In addition, the American company would not pay a fair fee for patents from other smartphone makers.
The competition authority not only fines Qualcomm, but also wants the chipmaker to adjust its trading practices. Bloomberg reports that the result could be that South Korean smartphone makers such as Samsung and LG will have to pay less to use Qualcomm chips in their smartphones.
Qualcomm speaks of an ‘unprecedented’ decision and will appeal. The American chipmaker states that the competition authority ‘ignores the economic reality of the market’. The fine will not take effect until the charges are in writing. Qualcomm said it could take months. The fine must then be paid within 60 days, but the chipmaker can get the money back if it successfully challenges the fine on appeal.
The South Korean competition authority also fined Qualcomm in 2009 of 260 billion won, currently about 206 million euros. The chipmaker was fined because it charged higher fees from customers who also buy chips from rivals and gave discounts to manufacturers who mainly bought chips from Qualcomm. The appeal in this case is still pending and a final decision has not yet been made.
Last year Qualcomm was fined millions in China for similar reasons. Then the manufacturer did not appeal, but a settlement with the authorities followed. Two investigations into the trade practices of the American chipmaker are also underway in Europe. In a preliminary conclusion, the European Commission stated that Qualcomm has illegally paid manufacturers for exclusive purchase of its chipsets. No fine has yet been imposed in this case, but it could follow if Qualcomm fails to refute the allegations.