Qualcomm Faces $865 Million Fine in South Korea Antitrust Case

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December 28, 2016 at 1:08 pm ET

The South Korea Fair Trade Commission on Wednesday said it would fine U.S. chipmaker Qualcomm Inc. about $865 million for alleged antitrust violations.

The regulator said the San Diego-based firm refused to license or impose restrictions on the license for the cellular patents necessary for the manufacture and sale of chipsets, and that the company used its chipset as leverage to force unfair license agreements, according to an unofficial translation provided by Qualcomm, which called the KFTC’s decision “unprecedented and insupportable.”

“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,” Don Rosenberg, Qualcomm executive vice president and general counsel, said in a statement. “We are pleased that our appeal will be to the Seoul High Court, which is known to rigorously analyze evidence and apply sound antitrust principles.”

The KFTC’s decision won’t take effect until a written decision and order is issued, a process that can take as many as six months, according to Qualcomm.

KFTC noted the significance of its ruling. “This case is meaningful in that the KFTC is the first to rectify Qualcomm’s unfair business model, under which Qualcomm has refused to license competing chipset companies while coercing unilateral license terms on handset companies in order to strengthen its monopolistic power in the patent license market and the chipset market,” the regulator said in the translation provided by Qualcomm.

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