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15:06, 12-Oct-2017
Taiwan fines Qualcomm $774 million for antitrust violations
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US chip maker Qualcomm Inc. faces an antitrust fine in Taiwan, the latest in a years-long streak of regulatory setbacks to its business model that comes as it also fights US regulators and iPhone maker Apple Inc. in court over many of the same legal issues.
The Taiwan fair trade watchdog said on Wednesday it would fine Qualcomm 23.4 billion New Taiwan dollars (774.14 million US dollars) for antitrust violations of its chip technology.
It said in a Chinese-language statement that Qualcomm had a monopoly over the chip market for several so-called modem technologies, which provide wireless data connectivity for mobile phones, and refused to license its technology to other industry players.
In Taiwan, Qualcomm is required to submit a progress report on the matter every six months to the watchdog body on negotiations with related parties.
Taiwan is home to Foxconn, the prime manufacturer of Apple products which currently relies on Qualcomm chips and is engaged in a patent royalty fight against the chip maker. /Reuters Photo.
Taiwan is home to Foxconn, the prime manufacturer of Apple products which currently relies on Qualcomm chips and is engaged in a patent royalty fight against the chip maker. /Reuters Photo.
In a statement, Qualcomm said it disagreed with the decision.
Once the final decision is issued in the coming weeks, Qualcomm said it will challenge the decision in court.
“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.
The decision is the latest challenge to Qualcomm’s business model, which involves selling chips and also licensing a suite of patents related to how those chips are put into a phone to provide mobile data to the device.
While the regulatory and legal attacks differ in some details, a key theme is the allegation that Qualcomm uses its dominant position in the market for modem chips to charge unfair royalty rates for its patents.
Last December, South Korean regulators fined Qualcomm 854 million US dollars for violating its competition laws, a ruling that followed an 975 million US dollars fine from Chinese regulators in 2015.
European regulators have also expressed antitrust concerns over Qualcomm’s 38 billion US dollar bid to buy NXP Semiconductors.
American multinational Qualcomm has been involved in lawsuits and subject to fines in several jurisdictions over 'unfair business practices'. / Reuters Photo
American multinational Qualcomm has been involved in lawsuits and subject to fines in several jurisdictions over 'unfair business practices'. / Reuters Photo
The US Federal Trade Commission is also suing Qualcomm over its licensing practices.
These regulatory challenges play out as Apple wages a global legal battle on Qualcomm’s long-held practice of charging a percentage of the total price of iPhones and other Apple devices as a licensing fee for its patents.
After those lawsuits were filed, Qualcomm brought an action against Apple before the US International Trade Commission seeking to ban imports of some iPhones.
Qualcomm filed a separate civil lawsuit accusing Apple of infringing the patents at issue in that action.
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Source(s): Reuters