We reported about the possibility yesterday that Qualcomm could be fined more than $800 million in South Korea for antitrust violations. That’s precisely what has happened today. The country’s antitrust regulator has fined the company $854 million for what it said were unfair business practices in modem chip sales and patent licensing. Qualcomm is not going to take this lightly, though, the company has said it’s going to challenge the regulator’s decision in a court of law.
The Korea Fair Trade Commission ruled today that Qualcomm misused its position as the market leader to force handset makers to pay royalties for an unnecessarily large set of patents as part and parcel of its sales of modem chips. The company was also found to have restricted competition by limiting or refusing licensing of its standard essential patents related to modem chips to competing chip manufacturers like MediaTek, Intel, and Samsung.
Qualcomm has been ordered by the regulator to pay the fine and negotiate with its competitors in good faith on patent licensing and if requested, also renegotiate chip sale agreements with smartphone manufacturers. This move could affect Qualcomm’s dealings with Apple, Huawei, Samsung, and Intel.
This is the largest ever fine imposed on a company in South Korea for antitrust violations. This is just the latest setback for a business that brings quite a bit of revenue for Qualcomm, licensing wireless patents to the mobile industry, it helps fill the gap left by the slugging smartphone market.
Qualcomm is filing for an immediate stay of the corrective order and will be appealing the regulator’s decision in the Seoul High Court.
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