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Please make sure your browser supports JavaScript and cookies and that you are not blocking them from loading. For more information you can review our Terms of Service and Cookie Policy.</s>SEOUL—A South Korean regulator said it would fine Qualcomm Inc. $852.9 million for alleged antitrust violations, the highest such penalty handed to an individual company here, as the U.S. chip maker faces global scrutiny over its patent-licensing business.

The Korea Fair Trade Commission said on Wednesday that Qualcomm breached antitrust law by limiting the access of competing chip makers to its patents. The company forced...</s>SEOUL — South Korea’s antitrust watchdog fined Qualcomm Inc. $852.9 million for alleged antitrust law violations as the U.S. chip maker faces global scrutiny over its patent-licensing business.

The Korea Fair Trade Commission said on Wednesday that Qualcomm violated antitrust law by limiting the access of competing chipset makers to its patents. The company also forced mobile-phone manufacturing companies into unfair license agreements by refusing to supply crucial phone chips to those that disagree with its terms, the KFTC said.

Qualcomm QCOM, +0.58% used its position as a key chip supplier as a leveraging tool in its negotiations with mobile-phone makers to agree to unfair conditions, said Shin Young-son, Secretary-General at KFTC.

Qualcomm dismissed KFTC’s charges, saying that it hasn’t hindered other chip suppliers from their ability to sell. The practice of licensing at the device level is an industrywide norm, said Don Rosenberg, general counsel at Qualcomm.

An expanded version of this report appears on WSJ.com.

Everybody lies on social media — just ask bankruptcy asset hunters.

Donald Trump’s Cabinet picks disagree with him on some key issues.</s>SEOUL—A South Korean regulator said it would fine Qualcomm Inc. about $853 million for alleged antitrust violations, the highest such penalty handed to an individual company here, as the U.S. chip maker faces global scrutiny over its patent-licensing business.

After a three-year investigation, the Korea Fair Trade Commission said on Wednesday that Qualcomm breached antitrust law by limiting competing chip makers’ access to its patents. The company also forced mobile-phone manufacturers into unfair license agreements by...</s>Word comes out of South Korea today that the country’s antitrust regulatory authority, the Korean Fair Trade Commission (KFTC), has ruled against Qualcomm in an ongoing antitrust investigation and is fining the company $865 million. The product of a 3 year investigation, the KFTC has ruled that Qualcomm abused their market position with respect to how and to whom they licensed out access to various important cellular patents, refusing to license certain patents and unnecessarily bundling others.

This latest fine from South Korea comes as Qualcomm has been in the hot-seat with various nations’ regulators over the past couple of years, all of whom has been investigating Qualcomm for similar reasons. This includes China, who fined Qualcomm $975 million and imposed new licensing rules on the company back in February of 2015, and the EU, who still has their own antitrust investigation open. At the core of both cases has been how Qualcomm has handled and licensed its patent portfolio, and at times how this intersected with how the company sold & priced their own chips implementing those patents.

South Korea’s ruling marks the second time Qualcomm has been fined by a national regulator for anticompetitive actions in the past couple of years, and is the second time altogether that the country has fined Qualcomm (they were also fined in 2009 in a dispute over CDMA; the appeal is still pending). Similar to last year’s case in China, the crux of the issue in the KFTC’s ruling appears to have been Qualcomm’s bundling of patents for chip customers, which the KTFC has ruled forced customers to license patents they did not need. Meanwhile the KFTC is also taking Qualcomm to task over their unwillingness to license standards-essential cellular technology patents to rivals, which restricted their ability to compete with Qualcomm. As it would not be possible to build standards-compliant modems without infringing on those patents, competing products would be open to lawsuits from Qualcomm.

Along with the $865 million fine, the KFTC is also ordering Qualcomm to change their business practices to put an end to their illegal behavior. This includes ending patent bundling and renegotiating patent licensing deals with customers if requested, and to properly negotiate the licensing of patents with rivals on a good faith basis.

In a response to the KFTC’s ruling, Qualcomm has released their own statement, stating that they disagree with KFTC’s ruling on the grounds that it violates international trade agreements, that no harm has been done to the market, and that the KFTC did not question Qualcomm’s licensing model in their previous CDMA investigation. Qualcomm has also said that once the formal written order from the KFTC comes out – a process that can take months – they will immediately appeal the order and the fine. Meanwhile it’s worth noting that this is the first such case where Qualcomm is appealing the ruling; in the China ruling, Qualcomm entered into an agreement with Chinese regulators to accept the fine and new patent licensing rules in order to end the investigation.</s>(ByS e Young Lee and Stephen Nellis, Reuters) – 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 U.S. 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.

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 U.S. 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.

Foreign companies including Apple, Intel, MediaTek and Huawei expressed their views during the regulator’s deliberation process, KFTC Secretary General Shin Young-son told a media briefing in the country’s administrative capital.

“We investigated and decided on these actions because Qualcomm’s actions limit overall competition,” Shin said, adding that the ruling was not about protecting domestic companies such as Samsung and LG Electronics but about improving market competition for all players.

Qualcomm said 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.

“Qualcomm strongly disagrees with the KFTC’s announced decision,” it said in a statement.

The decision in Seoul could mean lower costs for mobile phone makers and others in the tech supply chain who source Qualcomm chips, said a Taiwanese industry executive, declining to be named due to the sensitivity of the matter.

The fine is the latest in a series of antitrust rulings and investigations faced by Qualcomm from regulators across the globe. In February 2015, Qualcomm paid a $975 million fine in China following a 14-month probe, while the European Union in December 2015 accused it of abusing its market power to thwart rivals.

Stacy Rasgon, an analyst with AB Bernstein, said the fine itself was large but also said the KFTC’s orders for Qualcomm to alter its business practices have bigger future implications for the chipmaker.

A major challenge for Qualcomm, he said, would emerge if the ruling forces the company to license patents for some of its chips to rivals such as Intel, which has been competing hard to land its modem chips in mobile phones.

“How can they force you to license to a competitor? That’s what I never understood. I guarantee Qualcomm won’t want to do that,” he said, adding that the dispute could take years to play out in South Korean courts.

The KFTC fined Qualcomm 273 billion won in 2009 for abusing its dominant position in CDMA modem chips, which were then used in handsets made by Samsung and LG.

Regulators in other jurisdictions, including the United States and Taiwan, are also investigating Qualcomm. The KFTC move could serve as a benchmark for some of them.

“Korea’s decision will serve as an important reference point for us,” Chiu Yung-ho, vice chairman and spokesman for Taiwan’s Fair Trade Commission, told Reuters. He gave no timeline on when Taiwan’s own year-long investigation would be concluded.</s>SEOUL, South Korea (AP) — South Korea’s antitrust regulator slapped a 1.03 trillion won ($865 million) fine on Qualcomm Inc. Wednesday for allegedly violating competition laws.

The Fair Trade Commission said that the San Diego, California-based company had engaged in unfair business practices in patent licensing and chip sales, including refusing to let rival chipmakers license patents essential for chip making.

The FTC said Qualcomm allegedly used its dominant position in the modem chip market to force handset makers to pay license fees for a broad set of patents under terms it set unilaterally and to coerce handset makers into signing licensing contracts.

The fine, the biggest ever levied by the antitrust regulator, “will restore fair competition in the mobile communications industry,” Shin Young-sun, secretary general at the Fair Trade Commission, told reporters at a briefing.

Qualcomm rejected the ruling, saying it plans to appeal it in court.

Qualcomm made $25.1 billion in 2015 from collecting patent royalties and selling modem chips. South Korea, home to the world’s largest smartphone maker Samsung Electronics, accounts for about 20 percent of its global revenue.</s>Facing allegations of ‘abuse of market dominance,’ Qualcomm calls the fine ‘unprecedented and insupportable’

In a Dec. 28 announcement, the Korea Fair Trade Commission, charged with overseeing and regulating competition, charged U.S. chipmaker Qualcomm with leveraging its dominant position in the chip market to drive up royalty prices related to standard essential patents the company controls.

Qualcomm, according to company reps, not only disagrees with the findings and the amount of the fine, but also believes it was denied appropriate due process during the course of KFTC’s investigation.

“Qualcomm strongly believes that the KFTC findings are inconsistent with the facts, disregard the economic realities of the marketplace, and misapply fundamental tenets of competition law,” Don Rosenberg, executive vice president and general counsel, said in a statement. “Importantly, this decision does not take issue with the value of Qualcomm’s patent portfolio. Qualcomm’s enormous R&D investments in fundamental mobile technologies and its broad-based licensing of those technologies to mobile phone suppliers and others have facilitated the explosive growth of the mobile communications industry in Korea and worldwide, brought immense benefits to consumers and fostered competition at all levels of the mobile ecosystem.”

Standard essential patents (SEPs) represent fundamental mobile technologies that are absolutely necessary for a third-party to produce an LTE compatible device, for instance. Major players like Qualcomm, which invests heavily in R&D, hold portfolios of standard essential patents that are licensed to others based on fair, reasonable and non-discriminatory (FRAND) terms and conditions.

Korean regulators allege Qualcomm FRAND practices in the following ways (taken from a translation of the original KFTC documents):
• “Despite requests by competing modem chipset companies, Qualcomm has refused to license, or imposed restrictions on the license for, the cellular SEPs that are necessary for the manufacture and sale of chipsets.”
• “By linking the chipset supply with the patent license agreements, Qualcomm has coerced the execution and performance of unfair license agreements by using its chipset supply as leverage, while circumventing FRAND commitment.”
• “Qualcomm has provided handset companies with only comprehensive portfolio licenses and coerced unilaterally determined royalty terms without conducting a procedure to calculate fair compensation, while coercing unfair agreements, e.g., demanding handset companies to license their patents for free.”

The KFTC announcement refers to Qualcomm as a “vertically integrated monopolistic enterprise that operates business in the patent license market and the modem chipset market, which are upstream markets in the overall market structure.”

Qualcomm counters that no harm to competition is demonstrated; the results violated agreements allowing American companies access to evidence and the ability to cross examine; disrupts established licensing practices; undermines incentives to R&D investment; and results in a fine that is “unsupportable and not reasonably related to the size of the Korean market.”

“For decades, Qualcomm has worked hand in hand with Korean companies to foster the growth of the wireless Internet,” Rosenberg said. “Qualcomm’s technology and its business model have helped those companies grow into global leaders in the wireless industry. This decision ignores that win-win relationship.”

He continued: “Qualcomm’s repeated requests during the KFTC’s investigation for basic due process rights such as access to the case files and the right to cross examine witnesses were denied. These rights and others are supposed to be guaranteed to U.S. companies under the Korea-U.S. Free Trade Agreement, yet the KFTC declined to implement these fundamental procedural safeguards. We are pleased that our appeal will be to the Seoul High Court, which is known to rigorously analyze evidence and apply sound antitrust principles.”</s>SEOUL
• South Korea's antitrust regulator slapped a record 1.03 trillion won (S$1.24 billion) fine on Qualcomm for violating antitrust laws, the latest in a string of government actions that threaten the US chipmaker's most profitable business.

The South Korean Fair Trade Commission (KFTC) said yesterday that the company licensed its key patents to only mobile phone-makers and did not properly negotiate the terms of its licences. The agency also said Qualcomm coerced its customers into signing patent licence contracts when selling its chips in the country and did not fairly pay for the use of patents held by other phone-makers.

The decision from the home country of Samsung Electronics adds to investor concern that Qualcomm, which is also the subject of investigations in the United States and Europe, may struggle to defend its lucrative licensing business. Qualcomm gets the majority of profits - US$6.5 billion ($9.4 billion) in its most recent financial year - from selling the right to use technology fundamental to all modern phone systems.

Qualcomm, calling the decision "unprecedented and insupportable", said it will appeal the decision in Seoul's High Court.

"The KFTC ruling will not just benefit local handset-makers but other global chipset-makers too, so today's ruling from the commission seems a bit broader and stronger than that of the China's last year," said SU Intellectual Property patent lawyer Jung Dong Joon. "Qualcomm sales account for about 20 per cent in the Korean market and that's a significant market for Qualcomm."

For Samsung - the world's biggest phone-maker - and LG Electronics, the ruling opens up the possibility that they may be able to pay lower rates to Qualcomm. When Qualcomm settled an investigation by Chinese regulators last year, it accepted a lower rate charged on phones sold in that country. Samsung is Qualcomm's second-largest customer, accounting for about 11 per cent of its sales, according to Bloomberg's supply chain analysis.

KFTC also wants Qualcomm to let chipset-makers access its key patents, as well as to refrain from imposing unfair conditions on customers when signing contracts.

In 2009, the commission fined Qualcomm 260 billion won and ordered it to stop charging higher royalties to customers who buy chips from rivals. That case is under appeal.

Qualcomm was fined US$975 million last year by China, ending an inquiry that threatened its growth in the world's biggest mobile market.

The European Commission sent antitrust objections to Qualcomm last December, saying the chipmaker had paid "significant amounts" since 2011 to an unidentified major smartphone and tablet manufacturer in return for exclusive use of Qualcomm's chipsets. It may also have sold chipsets below cost from 2009 to 2011, to crush smaller competitor Icera.</s>South Korea’s antitrust regulator slapped a record 1.03 trillion won (US$853 million) fine on Qualcomm Inc. (IW 500/45) for violating antitrust laws, the latest in a string of government actions that threaten the U.S. chipmaker’s most profitable business.

The South Korean Fair Trade Commission said Wednesday that the company licensed its key patents only to mobile-phone makers and didn’t properly negotiate the terms of its licenses. The agency also said Qualcomm coerced its customers into signing patent license contracts when selling its chips used in mobile phones in the country, and it didn’t fairly pay for the use of patents held by other phone makers.

The decision from the home country of Samsung Electronics Co. adds to investor concern that the San Diego-based chipmaker, which is also the subject of investigations in the U.S. and Europe, may struggle to defend its lucrative licensing business. Qualcomm gets the majority of profit -- $6.5 billion in its most recent financial year -- from selling the right to use technology that’s fundamental to all modern phone systems.

Qualcomm, calling the decision “unprecedented and insupportable,” said it will appeal the decision in Seoul’s High Court. The KFTC ruling doesn’t go into effect immediately and Qualcomm will seek a stay from the courts while it appeals, said Don Rosenberg, the company’s general counsel.

“The KFTC ruling will not just benefit local handset makers but other global chipset makers too, so today’s ruling from the commission seems a bit broader and stronger than that of China’s last year,” said Jung Dong-joon, a patent lawyer at SU Intellectual Property. “Qualcomm sales accounts for about 20% in the Korean market and that’s a significant market for Qualcomm.”

For Samsung, the world’s biggest phone maker, and LG Electronics Inc., the ruling opens up the possibility they may be able to pay lower rates to Qualcomm. When Qualcomm settled an investigation by Chinese regulators last year, it accepted a lower rate charged on phones sold in that country. Samsung is Qualcomm’s second-largest customer, accounting for about 11% of its sales, according Bloomberg’s supply chain analysis. The U.S. company also designs and sells chips that are the main component in smartphones.

“Qualcomm, a holder of standard-essential patents as well as a monopolistic service provider of modem chips from manufacturing to sales, has violated its agreement to license patents on fair reasonable and non-discriminatory terms, known as FRAND,” the commission said in a statement. Qualcomm offers the rights to use all of its standard-essential patents, some of which cover the core technology behind modern wireless systems, in a combined package. Some of those inventions are used in industry standards.

Aside from the fine, the commission wants Qualcomm to let chipset-makers access its key patents, and refrain from imposing unfair conditions on customers when signing contracts. The Korean agency also said Qualcomm should make standard-essential patents available for separate licensing rather than bundling them with chipset sales. And the U.S. company should accord greater value to other companies’ patents when accounting for them in cross-licensing agreements, the commission said.

Qualcomm stock was mostly unchanged in after-hours trade. Samsung was down less than 1% at the close in Seoul, while LG was up 1.2%.

As in other cases that Qualcomm has won, the company expects the courts to side with it because its licensing business follows industry practices that have been in place for decades, Rosenberg said. Profits from licensing fees are crucial to funding its industry-leading research and design efforts and maintaining Qualcomm’s competitive edge.

“We’ve seen time and again that those who actually apply the rule of law to this, come to the conclusion that nothing is wrong,” Rosenberg said. “We’re going to fight this the way we fought all of them. We think we’ll have a much better time with the Korean courts than we had with the Korean Fair Trade Commission. We have a lot of faith in the independence of the courts.”

In 2009, the commission separately fined Qualcomm 260 billion won for deterring competition through discriminatory charges. KFTC ordered the chipmaker to stop charging higher royalties to customers who buy chips from rivals and to cease offering rebates to handset makers who buy products mainly from Qualcomm. That case is under appeal with the Korean Supreme Court.

The U.S. chipmaker has grappled with regulatory challenges around the world. It was fined $975 million last year by China, ending an inquiry that threatened the U.S. company’s growth in the world’s biggest mobile market.

The European Commission sent antitrust objections to Qualcomm last December, saying the chipmaker had paid “significant amounts” since 2011 to an unidentified major smartphone and tablet manufacturer in return for using Qualcomm’s chipsets exclusively in its products. It may also have sold chipsets below cost from 2009 to 2011 to crush smaller competitor Icera, now owned by Nvidia Corp., the commission added.

Resolving patent wrangles remains key to shoring up Qualcomm’s business. Last month, the chipmaker delivered a sales forecast for the December quarter in line with analysts’ estimates, saying it’s managed to sign technology-licensing agreements with smartphone manufacturers in China that had previously held back payments.
The Korea Fair Trade Commission fines U.S. company Qualcomm $852.9 million for alleged antitrust violations for restricting access of its competitors to its patents.