South Korea: Watchdog warns Qualcomm of record fine for licensing excess

Qualcomm Inc. which earns heavily from South Korea as the original patent holder of CDMA wireless technology could face a record-high fine of up to $881 million for excesses in licensing practices.

The Korea Fair Trade Commission will make a final decision soon and plans to reach a settlement with the US company within the year, according to government sources.

In November last year, the antitrust agency sent the US chipset giant Case Examiner’s Report charging the company of abuse of its dominant position and other unfair profiteering practices warning of a maximum fine of 1 trillion won if the practices are not fixed.

A senior government official said the KFTC plans to take strong action to ease the pains for local companies that must accept unfair contract terms from the U.S. company for use of the original technology even if the fine may not go to the maximum rate.

The chipset giant has been under fire from regulators around the world for abusing its licensing right to profit from smartphone makers. The company charges fees for licensing on device level instead of a chipset, pocketing over 1 trillion won from such pricing system.

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