Qualcomm Faces $854 Million Fine in South Korea

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The Korea Fair Trade Commission (KFTC) found Qualcomm's patent licensing and modem chip sales practices unfair, and proposed what is South Korea's largest fine to date, Reuters reported. The commission said that Qualcomm refused to license its chipset patents in some cases and used its market position as leverage to impose unfair licensing agreements in others.

In addition to the fine, Qualcomm must re-negotiate existing patent license agreements and use third-party negotiators in future patent discussions.

"This case is meaningful in that it fundamentally remedies the business model that made it possible for Qualcomm to unfairly maintain and expand its dominance for an extended period of time in the cellular SEP license and modem chipset markets," the KFTC wrote in its report.

In a statement Wednesday, Qualcomm said that it plans to appeal the decision in Korean court once a written order is issued, which could take up to six months.

"This is an unprecedented and insupportable decision relating to licensing practices that have been in existence in Korea and worldwide for decades and that the KFTC reviewed but did not question in a previous investigation of Qualcomm," the company said in a statement.

San Diego-based Qualcomm makes a wide variety of chipsets for everything from drones to cars, but it is perhaps best known in the US for its Snapdragon smartphone processors. They power many high end devices sold worldwide, including phones from Korean manufacturers, like the Samsung Galaxy S7.

This is not the first time Qualcomm has faced anticompetitive accusations in Korea. The KFTC levied a similar fine in 2009, for $208 million. The company also paid a $975 million fine in China last year, Reuters reported.

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