Qualcomm said that it will appeal the decision which would be the largest ever levied in South Korea.
The Korea Fair Trade Commission which is very nearly the unfortunate acronym of a US fried chicken outfit (KFTC) ruled Qualcomm abused its dominant market position and forced handset makers to pay royalties for an unnecessarily broad set of patents as part of sales of its modem chips.
Qualcomm also restricted competition by refusing or limiting licensing of its standard essential patents related to modem chips to rival chipmakers such as Intel, Samsung and MediaTek , the regulator said, hindering their sales and leaving their products vulnerable to lawsuits.
The regulator ordered Qualcomm to negotiate in good faith with rival chipmakers on patent licensing and renegotiate chip supply agreements with handset makers if requested – measures that would affect the U.S. firm’s dealings with major tech companies including Apple, Intel, Samsung and Huawei if upheld.
The KFTC said it began its investigations into Qualcomm’s practices in 2014 following complaints from industry participants, but did not name specific companies.
Foreign companies including Apple, Intel, MediaTek and Huawei expressed their views during the regulator’s deliberation process, KFTC Secretary General Shin Young-son told a media briefing in the country’s administrative capital.
Qualcomm said it will file for an immediate stay of the corrective order and appeal the decision to the Seoul High Court. The firm will also appeal the amount of the fine and the method used to calculate it.
“Qualcomm strongly disagrees with the KFTC’s announced decision,” it said in a statement.
While the fine is big, analysts said that the KFTC’s orders for Qualcomm to alter its business practices have bigger future implications for the chipmaker. The ruling forces the company to license patents for some of its chips to rivals such as Intel, which has been competing hard to land its modem chips in mobile phones.