If you have an Android device, and most of our readerbase probably does, there’s a very good chance it has a Qualcomm Snapdragon processor in it. There are tons of different processor manufacturers out there, from Huawei to Samsung and Mediatek. Qualcomm, however, has managed to edge out the market nicely, mainly through marketing and licensing deals. The way they do business in that regard has gotten them into hot water before, usually in regards to their licensing practices. Qualcomm’s normal procedure is to license patents, such as processor tricks to save battery and heat, as well as how wireless tech like LTE is handled, at the device level. The Korea Fair Trade Commission thinks this practice is out of sync with South Korean law and has issued Qualcomm a case examiner’s report, calling on them to defend themselves and outlining what the issues are.
For the most part, a manufacturer can only get a Qualcomm-made baseband chip by having the handset in question feature a Snapdragon processor. This makes implementation and development easier, but also ensures that handset makers won’t simply get Qualcomm’s superior baseband chip without featuring their more profitable Snapdragon. Qualcomm has done business this way for a while, but it has gotten them into trouble a few times. In China, for example, they were forced to pay a fine of $975 million and reconsider how they negotiate licenses, unbundling the baseband chips from the processors and allowing OEMs to point out any parts of the licensing agreement they find unreasonable so it can be renegotiated on the spot. On top of all that, they changed how they calculate royalties, now only calculating based on 65 percent of the net profit of a device.
The Korea Fair Trade Commission is proposing something similar to what happened in China, complete with monetary damages. Qualcomm, however, is defending their device-level patent practices as an industry standard, not meant to discourage competition but to make device development and sales, as well as profit sharing from those sales, easier on everybody involved. The Korea Fair Trade Commission has forced Qualcomm to pay up before, when it was found they were playing favorites with top customers in 2009 regarding their CDMA technology, so it’s doubtful they want to hear, at this point, that Qualcomm is only doing what everybody else is doing.