Qualcomm slapped with $875 million fine in South Korea for "abusing" its market position

Qualcomm has been slapped with yet another huge fine for violating fair trade laws, unfair business practices and demanding royalties on an “unnecessarily broad” set of patents.

This latest fine has been slapped on Qulacomm by the Korea Fair Trade Commission (KFTC) and amounts to over $854 million, reports Reuters.

The US-based Qualcomm was fined over $200 million in 2009 by the KFTC for Qualcomm’s abuse of CDMA patents and has recently coughed up $975 million in China following a 14-month probe into its business practices.

Qualcomm is the world’s largest manufacturer and designer of modems and SoCs (System-on-Chip) for mobile devices as well as wearables. The company holds innumerable patents in all fields related to the above products. It also holds a number of standard-essential patents, which, it has been alleged, the company is not willing to properly license to rivals.

A standard-essential patent is a patent defining a technical standard that a product must adhere to. Standards organisations are required to ensure that any manufacturer that manufactures a device that complies with standards defined by the patent will be required to license it.

The KFTC has ruled that Qualcomm has “abused” its market position by refusing or limiting the licensing of its patents to the likes of Intel, Huawei and others.

Qualcomm is understandably miffed, with a representative stating, "How can they force you to license to a competitor? That's what I never understood. I guarantee Qualcomm won’t want to do that."

The investigation is reported to have started in 2014 following complaints from unnamed “industry participants.”

"We investigated and decided on these actions because Qualcomm's actions limit overall competition," KFTC Secretary General Shin Young-Son in a media briefing.

Chipmakers like Intel have been trying to get into the lucrative modem and mobile SoC market, but haven’t been able to get a proper toe-hold just yet. Intel did succeed in getting Apple to use Intel modems in certain models of the iPhone 7, but these modems have proven themselves less capable than Qualcomm’s offerings.

A ruling of this nature has serious implications for Qualcomm.

Updated Date: Dec 28, 2016 13:44 PM