Skip to main content

Qualcomm faces a potential $900 million fine in South Korea over unfair market practices

qualcomm
Karlis Dambrans/Flickr
Qualcomm is in hot legal trouble yet again, as the California-based processor manufacturer finds itself on the wrong side of a potential $900 million fine that South Korea’s Fair Trade Commission looks to dole out, reports The Korea Times.

According to the government agency, which concluded a 17-month investigation into the matter, Qualcomm breached fair trade rules by abusing its position in the mobile processor market. The conclusion was that Qualcomm charged phone manufacturers excessively high licensing fees by basing its calculations on a phone’s wholesale price rather than its processors.

“Qualcomm has been collecting royalty fees from mobile phone manufacturers based on certain fixed rates from the suggested price of a mobile device,” said an FTC official. “Qualcomm should have sought royalty fees based on each chipset.”

The Korean newspaper reports that Qualcomm collects $1.27 billion annually in royalty fees from South Korean phone manufacturers like Samsung and LG, with the South Korean market accounting for 16 percent of Qualcomm’s sales last year. For its part, Qualcomm said that it significantly helped these phone makers become some of the top dogs in the phone market.

Whether or not there’s truth to that statement, the FTC may fine Qualcomm close to a billion dollars for its transgressions, with the government agency set to close the case by year’s end. If the number sticks, it will be the highest monetary penalty the FTC has ever issued toward a company.

As alluded to earlier, Qualcomm was fined $975 million by China’s National Development and Reform Commission (NDRC) in 2015 for abusing its position as market leader with high licensing costs and royalties. As a result of the anti-trust case, Qualcomm changed its licensing practices, with the company creating revised patent agreements after the case.

More recently, Qualcomm filed a complaint against Meizu, accusing the Chinese phone manufacturer of using its technologies without the correct licenses. The case is currently ongoing.

Editors' Recommendations

Williams Pelegrin
Former Digital Trends Contributor
Williams is an avid New York Yankees fan, speaks Spanish, resides in Colorado, and has an affinity for Frosted Flakes. Send…
How to download watchOS 10 on your Apple Watch
An Apple Watch showing the watchOS 10 Developer Beta update.

It's that time of year again when Apple releases its major mobile operating system updates, and alongside iOS 17 for the iPhone, we're also getting a big new release for Apple's wearables in watchOS 10 — possibly the most significant software update we've ever seen for the Apple Watch.

For one, watchOS 10 brings with it a fresh new design to the user interface that's almost like owning an entirely new Apple Watch. However, there's a lot more here than just a fresh coat of paint, including new Smart Stack widgets, more powerful workout tracking for cyclists and hikers, new mental and vision health features, and more.

Read more
How to download iOS 17 on your iPhone right now
iOS 17 logo and renders on Apple's website.

Apple has officially released iOS 17, the latest major release of its mobile operating system for the iPhone. After three months of beta testing, iOS 17 is finally ready for public consumption, and it brings with it fun new features like interactive widgets, Contact Posters, a new StandBy smart display mode, multiple timers and improved notifiations, and much more.

Read more
How to download iPadOS 17 on your iPad
New widgets for iPadOS 17.

While we have yet to see any new iPads this year, Apple has just unleashed iPadOS 17, a major update for its tablet operating system that promises to breathe new life into any recent iPad model you already own.

Once you install iPadOS 17, you'll be able to enjoy the iPhone's lock screen features on the larger screen, plus the interactive widgets that also came to the iPhone in this year's iOS 17 update. In addition, iPadOS 17 boasts some nice improvements to Stage Manager, a new tablet-sized Health app, significantly improved PDF support in Notes, and even a throwback wallpaper from the original iPad era.

Read more