Qualcomm recently came under the scrutiny of South Korean antitrust regulators due to their patent licensing practices, such as charging license fees to device OEMs based on a percent of device cost rather than component cost. Qualcomm is under investigation in many countries for similar reasons, but South Korea in particular is after them because some of their practices violate South Korean competition law, especially in the area of license negotiation. They were served with a Case Examiner’s Report from the Korea Fair Trade Commission stating that The document was the Commission’s way of giving them the chance to respond and present their defense before formal hearings began.
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After publicly acknowledging the investigation, Qualcomm is now putting in applications in U.S. Federal courts to get their hands on papers regarding them and their products submitted to the Korea Fair Trade Commission by customers and rivals. In particular, Qualcomm is looking to have subpoenas served to Apple, Samsung, Mediatek, Broadcom, Texas Instruments and Via Technologies. Rather than jumping to issue an official defense or public statement, Qualcomm plans to gather up the documentation and make a case based on what was presented, as well as what was in the Case Examiner’s Report.
There is definitely cause for Qualcomm to be worried. As well as this antitrust investigation, there are two in progress from the European Union and a recently concluded one in China that Qualcomm wound up paying a fine for, to the tune of $975 million. A change of licensing procedures was also in order, but it seems that was far from enough to satisfy antitrust regulators in other countries. Qualcomm has even looked to splitting its chipmaking and licensing businesses into separate entities as a possible solution, but dropped that possible solution in the end. It seems like the only party to not go after Qualcomm in antitrust proceedings at this point is their home country, the United States. Given their current circumstances and recent restructurings costing over 1,000 San Francisco employees their jobs, Qualcomm is definitely in hot water. These investigations’ likely unfavorable conclusions could lead to more job loss, as well as sweeping changes to Qualcomm’s business practices.