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Qualcomm fined $854 million for unfair business practices

South Korea's antitrust regulator has ruled that Qualcomm abused its market position by charging royalties to smartphone makers for unnecessary patents.

Published onDecember 28, 2016

Qualcomm, the leading mobile chip maker, has recently been hit with a large fine in South Korea in the sum of 1.03 trillion won (around $854 million). According to a report published by Reuters, the Korea Fair Trade Commission (KFTC) has ruled that Qualcomm abused its market position by charging royalties to smartphone manufacturers for several unnecessary patents.

In addition, the company also restricted competition by limiting and in some cases even refusing to license its patents related to modem chips to its competitors. These competitors include Intel, MediaTek, and Samsung, among others.

The Korea Fair Trade Commission has also ruled that the company must start negotiating with honest intentions regarding patent licensing with its rivals. And if requested, Qualcomm will also have to renegotiate the chip supply agreements it has with smartphone manufacturers.

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As you can imagine, Qualcomm is not very happy with the fine, which is said to be the largest to date in South Korea. The company has already announced that it plans on challenging the decision in court, though it may take some time before the court makes its final ruling on the case.

It’s not the first time Qualcomm runs afoul of competition regulation. In 2015, the chip maker paid $1 billion to settle an antitrust investigation in China over its patent licensing practices.