Qualcomm Asked to Pay Over $850 Million Fine For Violating Antitrust Laws in South Korea

by Anvinraj Valiyathara 3

Qualcomm, the smartphone chipset maker has been asked to pay a huge fine of 1.03 trillion (around $853 million) by the South Korea’s Fair Trade Commission (KFTC) for violating antitrust laws.

In summer this year, KFTC had carried out an investigation on the U.S. based chipset maker in South Korea over unfair business practices. Hence, Qualcomm has been fined a massive sum of $853 approximately. It is the highest ever fine imposed fine by KFTC.

Qualcomm has multiple patents in CDMA and LTE cellular network standards. It charges royalties from various smartphone makers and chipmakers for using its patents. A recent report has revealed that it generated $6.5 billion in the most recent fiscal year.

It collects royalties based on the cost of a mobile device. This indicates the company earns huge revenue through royalty licenses.  According to KFTC, Qualcomm has not only denied to share patent rights with chipset manufacturing companies but also made them to sign unfavorable agreements and it did not pay anything for their patents.

It stated that, “The accusation also includes restricting competition by limiting licensing of its standard essential patents to rivals such as Intel, Samsung Electronics and MediaTek.” The regulatory body has ordered the chip maker to renegotiate with rival companies on patents and supply contracts.

Related: Qualcomm’s Snapdragon 835 to Appear in Windows PCs Starting Next Year: Bad News for Intel

It indicates that Qualcomm will be required resign its contracts with companies like Apple, Samsung and Huawei.  The chipset maker has said that it will challenge the verdict in the Seoul High Court. However, the company is required to pay the fine within 60 days of the announcement of the verdict.

However, one should know that KFTC’s decision will not be implemented until it issues a written notice to Qualcomm. It can around four to six months for the regulatory body to issue a written order.

It isn’t the first case levied upon Qualcomm on unfair business practices. Qualcomm had to pay $975 million as fine in China when it violated the antitrust regulatory laws of the country. It has also paid fine in EU for similar issue and for the same matter it is under investigation in Taiwan and the U.S.

(Source 1, 2)