S. Korea fines Qualcomm 1tril won

LATEST ANTITRUST SETBACK: US chip designer abused dominant market position, says regulator

SOUTH Korea’s antitrust regulator fined Qualcomm Inc 1.03 trillion won (RM3.8 billion) for what it called unfair business practices in patent licensing and modem chip sales, a decision the United States firm said it will challenge in court.

The Korea Fair Trade Commission (KFTC) said yesterday Qualcomm abused its dominant market position and forced handset makers to pay royalties for an unnecessarily broad set of patents as part of sales of its modem chips.

The fine is the largest ever levied in South Korea.

The US firm also hindered competition by refusing or limiting licensing of its standard essential patents for modem chips to rival chipmakers such as Intel Corp, Samsung Electronics Co Ltd and MediaTek Inc, limiting competition.

Qualcomm said it will file for an immediate stay of the corrective order and appeal the decision to the Seoul High Court. The firm will also appeal the amount of the fine and the method used to calculate it.

“Qualcomm disagrees with the KFTC’s announced decision,” it said.

The fine is the latest in a series of antitrust rulings and investigations on Qualcomm by regulators across the globe.

The KFTC ordered Qualcomm to correct its business practices by negotiating patent licensing with competing chipmakers in good faith and without unfair requirements such as restricting potential customers the licensees can sell chips to.

The regulator also ordered Qualcomm to end unnecessarily broad patent licensing requirements to handset makers in modem chip sales agreements and said it must renegotiate contracts with handset makers if requested to do so.

“This case fundamentally corrects a business model that allowed Qualcomm to maintain and extend its dominance,” said the KFTC. Reuters