Qualcomm was fined $854 million for violating several of South Korean antitrust laws. The penalty was issued by the Korea Fair Trade Commission (KFTC) on Wednesday, as the said government agency concluded that the American tech giant abused its dominant position in the market to strongarm phone makers into paying for a needlessly broad range of patents when acquiring the company’s chips. The KFTC also found Qualcomm embraced anti-competitive practices by refusing or severely restricting licensing of some key modem chips patents to rivals like Samsung, Intel, and MediaTek. Apart from directly affecting their sales, the South Korean antitrust watchdog concluded that this practice left Qualcomm’s rivals unprotected from common lawsuits. In addition to the $854 million fine, the KFTC ordered the company to start negotiating with rival firms in good faith, adding how Qualcomm should be looking to renegotiate a significant portion of its patent licensing and supply contracts previously signed in the Far Eastern country.
The San Diego-based semiconductor manufacturer already announced plans to legally challenge this penalty which happens to be the largest antitrust fine ever issued in South Korea. Direct financial repercussions aside, the KFTC’s directive ordering Qualcomm to renegotiate its business agreements in the country would also affect its agreements with some of the largest tech giants on the planet like Samsung, Intel, Apple, Huawei, and MediaTek. In addition to filing an appeal with the Seoul High Court, Qualcomm’s representatives also confirmed that the company will appeal the method used by the KFTC to calculate its seminal fine.
The KFTC’s ruling was made over two years after the agency started probing into Qualcomm’s alleged violations of anti-competitive laws. The initial investigation was prompted by several complaints from Korean companies and international firms operating in the Far Eastern country, though no particular complainants have been named during the process. Shin Young-son, the KFTC Secretary General, made a statement to the press following this ruling. During his short speech on Wednesday, Shin explained how the South Korean antitrust watchdog wasn’t looking to help Qualcomm’s domestic rivals by issuing the American tech giant with an unprecedented penalty but was instead aiming to improve the overall market conditions in the country.