14 DAY TRIAL // The South Korean Fair Trade Commission recently decided to fine Qualcomm with a record $865 million over antitrust violations. The KFTC will issue a corrective order detailing the issues with the company’s business practices.
The South Korea regulatory commission stated that Qualcomm’s “unnecessarily broad patent licensing requirements” caused phone makers to pay more royalties than required for such modem chips. The company was found in violation of competition law after competing chip manufacturers were given limited access to standard essential patents.
Regarding the KFTC’s order, Qualcomm said it was “an unprecedented and insupportable decision relating to licensing practices that have been in existence in Korea and worldwide for decades.”
Qualcomm intends to appeal KFTC’s decision
The company also said that details wouldn’t be provided until the KFTC issues a written decision and order, which could take between four to six months. Afterwards, the company would have to pay the fine in 60 days, even if it appeals the decision, which it intends to do. Qualcomm announced that it would “file for an immediate stay of the corrective order and appeal the KFTC’s decision to the Seoul High Court.”
“Qualcomm strongly disagrees with the KFTC’s announced decision, which Qualcomm believes is inconsistent with the facts and the law, reflects a flawed process and represents a violation of due process rights owed American companies under the Korea-U.S,” said Qualcomm’s statement.
This is not Qualcomm's first fine for antitrust practices
The company showed that the KFTA’s press release lacked a coherent theory of competition law violations, didn’t show any evidence, and imposed a fine that is not reasonably related to the size of the Korean market.
“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, executive vice president and general counsel, Qualcomm Incorporated.
But this is not the first time that Qualcomm receives a fine from antitrust regulators. Last year, the company was fined $975 million in China and it agreed to lower royalty rates for Chinese manufacturers.