(Image courtesy of Maurizio Pesce, Creative Commons).

Qualcomm Faces $773 Million Antitrust Fine in Taiwan

Oct. 11, 2017
Regulators said that Qualcomm hampered competition by refusing to license patents to rivals and forcing customers to accept unfair licensing deals.

Qualcomm has amassed patents central to 3G and 4G communications used in smartphones. But how it negotiates licensing deals for these patents has faced regulatory scrutiny in South Korea, China, Europe, and the United States. Now it is facing penalties from another country.

On Wednesday, the company was fined $773 million by Taiwan’s Fair Trade Commission on the grounds that it has a monopoly over cellular modem chips. The agency said that Qualcomm unfairly hampered competition by refusing to license to rivals and alleged that it forced customers to sign licensing deals as a condition for supplying modem chips.

The allegations resemble other regulatory complaints against Qualcomm, which has argued that its tactics are staples of the semiconductor industry. The agency said in a statement that Qualcomm had violated local laws for the last seven years. It estimated that the chipmaker had reaped more than $13.2 billion in licensing fees from Taiwanese firms.

Qualcomm said that it would appeal the fine once a formal decision is handed down. In the last two years, the firm has paid $975 million in fines to assuage China’s antitrust agency and incurred an $853 million fine from South Korea’s regulators. In Europe, it could be fined $665,000 per day for failing to cooperate with antitrust investigators.

"The fine bears no rational relationship to the amount of Qualcomm’s revenues or activities in Taiwan, and Qualcomm will appeal the amount of the fine and the method used to calculate it," the company said in a statement. Regulators estimated that the company has sold around $30 billion worth of wireless chips on top of patent royalties in Taiwan.

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