While it has only been a year after incurring a $975 million antitrust fine in China, Qualcomm Inc. is once again in a predicament for its business practices.
The mobile chipmaker Qualcomm has been fined a staggering amount of $854 million by South Korea's antitrust regulator, which has ruled that Qualcomm was engaged in unfair business practices regarding the licensing of its patents. This is the largest fine ever levied in South Korea.
As per the reports, the Korea Fair Trade Commission (KFTC) said on Wednesday that Qualcomm abused its dominant market position and forced handset makers to pay royalties for an unnecessarily broad set of patents as a part of its modem chips' sales.
The KFTC has ordered Qualcomm to correct its business practices by negotiating patent licensing with competing chipmakers in good faith and without unfair requirements such as restricting potential customers from getting the license to sell chips.
The regulator has also ordered Qualcomm to end unnecessarily broad patent licensing requirements to handset makers in modem chip sales agreements and has mentioned that it must renegotiate contracts with handset makers if requested to do so.
Additionally, KFTC said that this case will now fundamentally correct a business model that allowed Qualcomm to maintain and extend its dominance.
On the contrary, Qualcomm in a statement said that it strongly disagrees with the KFTC's announced decision. As such, Qualcomm has stated that it will file for an immediate stay of the corrective order and appeal the decision to the Seoul High Court. The firm will also appeal the amount of the fine and the method used to calculate it.