What you need to know
- A South Korean court today upheld a record $873 million fine imposed by the Korea Fair Trade Commission (KFTC) against Qualcomm for unfair business practices.
- Qualcomm Executive Vice President Dan Rosenberg says the company will soon appeal to the Korea Supreme Court.
- The KFTC, however, is yet to issue any comment on whether it would also lodge an appeal.
In what comes as a major setback for Qualcomm, a Seoul High Court today upheld (via Reuters) the record $873 million fine imposed against the company by the Korea Fair Trade Commission (KFTC) over unfair business practices relating to sales of its modem chips and patent licensing.
Rejecting Qualcomm's appeal against the penalty, the court said the chipmaker had indeed abused its dominant position in the market.
Seoul High Court Judge Noh Tae-ak said in his ruling:
The defendant exerted a significant influence over mobile phone manufacturers either through unfair relationships or making them depend on the defendant's supplies of modem chipsets.
The court has also confirmed some of the remedies that had been proposed by the Korea Free Trade Commission, including one that calls for Qualcomm to stop discriminating against rival chipmakers and license some of its standard essential patents (SEPs).
However, the court did dismiss KFTC's claims that the chipmaker had disadvantaged smartphone makers by signing "comprehensive" licensing deals, which allowed it to continue taking a cut of the phone's price as license fee.
Qualcomm said that it was "gratified" by the court's decision to reverse the KFTC's order to renegotiate the licensing terms but disagreed with the decision to accept parts of the regulator's order. It now plans to appeal those provisions to the Korea Supreme Court.
Don Rosenberg, Qualcomm's Executive Vice President, said in a statement:
We disagree with the court's decision to accept parts of the KFTC order and will immediately seek to appeal those provisions to the Korea Supreme Court