South Korea’s antitrust regulator fined Qualcomm $854 million for what it called unfair business practices in patent licensing and modem chip sales, a decision the US chipmaker said it will challenge in court.
The fine, the largest ever levied in South Korea, marks the latest antitrust setback for Qualcomm’s most profitable business of licensing wireless patents to the mobile industry, at a time when the business is facing headwinds from a cooling smartphone market. Shares in Qualcomm fell 1.7 percent on Nasdaq.
The Korea Fair Trade Commission (KFTC) ruled on Wednesday Qualcomm abused its dominant market position and forced handset makers to pay royalties for an unnecessarily broad set of patents as part of sales of its modem chips.
Qualcomm also restricted competition by refusing or limiting licensing of its standard essential patents related to modem chips to rival chipmakers such as Intel, Samsung Electronics and MediaTek, the regulator said, hindering their sales and leaving their products vulnerable to lawsuits.
The regulator ordered Qualcomm to negotiate in good faith with rival chipmakers on patent licensing and renegotiate chip supply agreements with handset makers if requested — measures that would affect the US firm’s dealings with major tech companies including Apple, Intel, Samsung and Huawei Technologies if upheld.
The KFTC said it began its investigations into Qualcomm’s practices in 2014 following complaints from industry participants, but did not name specific companies.
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