South Korea: Qualcomm faces antitrust fines over licensing practices

Qualcomm said South Korean antitrust authorities have accused the chipset giant of violating South Korean law through its licensing practices and proposes to fine the company. The disclosure about the investigation, which was first launched earlier this year, is the latest in a series of tussles the company has had with antitrust regulators worldwide over its licensing business, which is how Qualcomm derives the majority of its profit.

In a statement, Qualcomm said it recently received the Korea Fair Trade Commission’s (KFTC) staff-generated Case Examiner’s Report (ER), which starts a process that affords Qualcomm the ability to respond to allegations and defend itself. The report alleges, among other things, that Qualcomm does not properly negotiate aspects of its licenses, and that its practice of licensing patents only at the device level and requiring that its chipset customers be licensed to its intellectual property violate South Korean competition law.

“The allegations and conclusions contained in the ER are not supported by the facts and are a serious misapplication of law,” Qualcomm said in its statement. “Our patent licensing practices, which we and other patent owners have maintained for almost two decades, and which have facilitated the growth of the mobile communications industry in Korea and elsewhere, are lawful and pro-competitive. Device level licensing is the worldwide industry norm, and Korean companies have long enjoyed the benefits and protections of access to our patents, which cover essentially the entire device.”

Qualcomm said it plans to “vigorously defend” itself at KFTC hearings and that it remains hopeful that the commission will reject the conclusions of the report. “We expect the process to take some time. Until then, we intend to continue to invest in leading technologies that drive the industry forward and share those innovations through its licensing program.”

A spokesman for KFTC said they can’t comment on ongoing investigations, according to the Wall Street Journal.

Full content: The Wall Street Journal

Want more news? Subscribe to CPI’s free daily newsletter for more headlines and updates on antitrust developments around the world.