Trade officials in Taiwan have hit American chip designer Qualcomm with a NT$23.4bn (US$774m) fine for abusing its dominant position in the wireless electronics world.
The California biz, which is the brains behind the Snapdragon cellular broadband modem chips used in gadgets globally, was found to have strong-armed phone makers into expensive licensing deals and agreeing to shut out its competitors.
The Taiwanese Fair Trade Commission said on Wednesday the fine reflects what it found to be seven years of Qualcomm using its position as the main chip designer for LTE, CDMA, and WCDMA chips to push its customers into agreeing to what it found to be unfair licensing agreements.
The watchdog said Qualcomm forced companies to agree to exclusivity deals in order to get its baseband chips, illegally shutting other chip designers out of the market and giving an unfair boost to other Qualcomm products.
Not surprisingly, Qualcomm disagrees with the commission's findings and says it will be appealing the decision.
"Qualcomm disagrees with the decision summarized in the TFTC’s press release and intends to 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," a spokesperson for the chip designer told us.
"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."
Taiwan is one of several countries whose trade bods have taken a keen interest in, how can we put this... Qualcomm's unique and inventive approach to licensing. Last year, authorities in South Korea hammered Qualy with a $853m fine for breaking fair trade laws, and in the US, the Federal Trade Commission has dumped a bucket of antitrust allegations on the Snapdragon designers' heads.
It is not only government regulators seeking to haul Qualcomm into court. Apple has also called in its lawyers to extract a pound of flesh from the system-on-chip designer. The Cupertino idiot-tax operation claimed it has been overcharged by Qualcomm to the tune of $1bn over the years thanks to excessive royalties it has been forced to pay for patented technology Apple doesn't even believe it uses.
Not only have Cook and co. filed their own challenge to Qualcomm's patent licensing scheme, they have pushed their manufacturing partners to stop paying Qualcomm altogether, further eating into Qualy's licensing revenues.
If that wasn't enough, Qualcomm also found itself on the hook for $940m in fees and rebates related to its licensing dispute with Blackberry this year. ®