Qualcomm Inc. (IW 500/47) was fined a record NT$23.4 billion (US$773 million) by Taiwan’s Fair Trade Commission in the latest blow from regulators over the way the U.S. company prices mobile phone chips and patents.
The company has been violating antitrust rules for at least seven years and Qualcomm collected NT$400 billion in licensing fees from local companies during that time, the Taiwanese regulator said on its website Wednesday. Qualcomm disagrees with the decision and intends to appeal, the San Diego-based company said in a statement.
Qualcomm has attracted scrutiny from regulators around the world, with it practices probed in South Korea, China, Japan, the European Union and elsewhere. The company is engaged in a fierce battle with Apple Inc. that has seen the iPhone maker cut off billions of dollars in payments to Qualcomm.
The Taiwanese regulator said Qualcomm has monopoly market status over key mobile phone standards and by not providing products to clients who don’t agree with its conditions, the U.S. company is violating local laws. It said Taiwanese companies had purchased $30 billion worth of Qualcomm baseband chips.
“Qualcomm holds big number of standard essential patents in CDMA, WCDMA and LTE segments and is the dominant provider of CDMA, WCDMA and LTE baseband chips,” the FTC said. “It abused its advantage in mobile communication standards, refused to license necessary patents.”
Besides the fine, the Fair Trade Commission told Qualcomm to remove previously signed deals that force competitors to provide price, customer names, shipment, model name and other sensitive information as well as other clauses in its agreements.
Qualcomm will “seek to stay any required behavioral measures and appeal the decision to the Taiwanese courts after receiving the TFTC’s formal decision, which is expected in the next several weeks,” according to the statement. “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.”
By Bloomberg News