Qualcomm faces £696m fine for antitrust violation

US chip giant Qualcomm is to face a fine of £696m for alleged antitrust violations by South Korea’s top regulator, The Register reports.

The Korea Fair Trade Commission today reached the decision after a three-year probe of Qualcomm, finding that some of the company’s business practices have violated Korean competition law. The fine issued by the commission is the largest ever levied in South Korea.

The fine was passed after it was alleged that Qualcomm limited competing chip makers’ access to its patents and leveraged their market position to force mobile phone manufacturers into unfair license agreements. A statement supported by Shin Young-son, the commission’s secretary-general, who has confirmed that the chip supplier used its market position as a leveraging tool.

Qualcomm has released a statement saying it “strongly disagrees” with the decision which it described as “unprecedented and insupportable”, adding that its licensing practices have been in existence in Korea, and worldwide for decades.

The chip maker will appeal the KFTC’s decision to the Seoul High Court.

Don Rosenberg, general counsel at Qualcomm said the company 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.”

He said the findings “failed to take into account Qualcomm’s huge R&D investments in fundamental mobile technologies and its broad-based licensing of those technologies to mobile phone suppliers and others have facilitated the explosive growth of the mobile communications industry in Korea and worldwide, brought immense benefits to consumers and fostered competition at all levels of the mobile ecosystem.”

Last year Chinese regulators slapped a $975m penalty on the company for alleged antitrust violations, which Qualcomm did not contest.

In 2015 the European Commission also opened two antitrust investigations into possible abusive behaviour by Qualcomm, including allegations of “predatory pricing”.

The company had revenues of greater than $25bn in its 2015 fiscal year, of which about 30 per cent stemmed from its patent-licensing business.