After facing investigations in Europe, U.S chipmaker Qualcomm is again in hot water after an anti-trust regulator issued it with an unprecedented fine of 1.03 trillion won, which amounts to a whopping $853 million.
The fine came against allegations of violating the anti-trust laws by the South Korean Fair Trade Commission, which alleged that the firm only used to license its key technology patents to mobile phone makers. Another claim was that Qualcomm didn’t indulge in negotiations regarding the terms of the licenses it issued.
The commission further added that the US chipmaker didn’t pay fairly to other mobile phone makers for using their patents while conflict with this practice on the other side. It with coercing mobile makers to sign patent license contracts when they used chips made by it for use in South Korea.
Qualcomm’s share prices might experience a dip after this ruling, probably a huge one as its main source of income was being seen as compromised. Its main profit is derived from allowing mobile phone makers to use technology that is highly important but is owned by Qualcomm. It registered a high profit of $6 billion in just the last financial year of which a major chunk came from just this source.
The company’s official response has been quite resounding as it has termed the ruling as unexpected and totally unfound for. It also has signaled that it will refer to South Korea’s High courts to appeal against this fine and the restrictions put by the commission on Qualcomm.
But, to mobile phone makers, this might turn out be good as they will now be able to negotiate lower prices against licensing agreements when dealing with Qualcomm as evidenced by a recent similar Chinese ruling against the company. The ruling made Qualcomm offer lower rates for the use of its licensing and technology in China.