As expected, South Korea's Fair Trade Commission imposed a fine of 1.03 trillion South Korean won, or about US$852.8 million, on U.S. chipmaker Qualcomm Inc. and its two affiliate units for abuse of dominant market position.
In its Dec. 28 decision, the commission held Qualcomm in breach of its commitment as a patent holder to license patent users on fair, reasonable and nondiscriminatory terms. The FTC pointed out that Qualcomm did not properly negotiate the terms of its licenses despite requests from rival chipmakers. The company also coerced customers into signing unfair patent license deals on selling its mobile phone chipsets and that it did not provide fair compensation for the use of patents held by other mobile phone makers, the watchdog said.
The FTC directed Qualcomm to fix its "unfair business model," given its monopolistic power in the markets where its operates. Qualcomm affiliates Qualcomm Technologies Inc. and Qualcomm CDMA Technologies Asia-Pacific PTE were also affected by the ruling.
In a same-day response, Qualcomm said it strongly disagreed with the decision, calling it "unprecedented and insupportable" in accordance with competition laws. The company added that it will appeal the FTC's ruling to the Seoul High Court, including the fine's amount and the way it was computed.
As of Dec. 27, US$1 was equivalent to 1,208.35 South Korean won.