South Korea mulls TREEELLION-Won fine for Qualcomm

Royalties rumble could cost chip-maker US$880m, a bit less than LG and Samsung pay

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South Korea's Fair Trade Commission (KFTC) has Qualcomm in its sights again, telling the Korea Times the company could be up for a trillion-won fine (nearly US$880 million) over anti-trust violations.

The fine (which would set a KFTC record) concerns an ongoing dispute in South Korea over how Qualcomm levies royalties for its mobile phone chips.

The chip-designer first stated it was under investigation by the KFTC in November; the regulator has been investigating the company for nearly 18 months, according to Korea Times.

The regulator wants the company to charge its standards-essential patent royalties on a per-chip basis; Qualcomm said in November charging royalties for finished products from its OEMs is normal.

A KFTC official told Korea Times “Qualcomm has been collecting royalty fees from mobile phone manufacturers based on certain fixed rates from the suggested price of a mobile device. Qualcomm should have sought royalty fees based on each chipset”.

The regulator also believes the company applies unfair conditions to the use of its patents.

Qualcomm's chief customers in South Korea are Samsung and LG Electronics, and they account for more than US$1 billion of the company's annual license fee haul.

Licensing has also caused trouble for the company in Europe and China. ®

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