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From Antitrust Law Daily, October 11, 2017

Qualcomm fined by Taiwan FTC for competition law violations, pledges appeal

By Jeffrey May, J.D.

The Taiwan Fair Trade Commission (TFTC) has fined Qualcomm Inc. approximately $23.4 billion Taiwan dollars (about U.S. $773 million) for violating the country’s competition laws in its licensing of patents essential to mobile communications standards. In a statement today, the chip supplier said it disagreed with the TFTC’s decision and that it would seek to stay any required behavioral measures and appeal the decision to the Taiwanese courts. Qualcomm questioned the fine, saying that the fine bore no rational relationship to the amount of Qualcomm’s revenues or activities in Taiwan. The TFTC has not yet released an English-language version of its summary of the decision.

Taiwan is not alone in challenging Qualcomm’s licensing practices on competition grounds. In the United States, during the final days of the Obama Administration, the FTC filed a complaint, alleging that the company monopolized the modem chip market by, among other things, consistently refusing to license standard-essential patents on fair, reasonable, and non-discriminatory or FRAND terms to competitors. The agency said in a statement at that time that the company’s sales and licensing practices hampered Qualcomm’s competitors and threaten innovation in mobile communications. The agency is seeking an injunction against Qualcomm "to undo and prevent its unfair methods of competition in or affecting commerce." The complaint was filed over the objection of the current acting chairman of the agency.

Apple Inc. also filed a complaint against Qualcomm, contending that the company violated federal antitrust and patent law by breaching its commitment to license certain patents that were essential to the latest cellular standards on FRAND terms. That suit seeks $1 billion in damages from rebate payments Qualcomm allegedly withheld, as well as injunctive and declaratory relief ranging from findings of Apple’s non-infringement of numerous patents to setting FRAND royalties for any patents-in-suit determined to be essential and infringed by Apple. The suit also seeks redress for Qualcomm’s abuse of its monopoly power in the technologies used to connect to cellular networks.

Outside the United States, Korea’s FTC has fined Qualcomm for antitrust violations as well. In December 2016, the KFTC announced that it had fined Qualcomm millions for allegedly coercing the execution and performance of unfair license agreements by using its chipset supply as leverage and circumventing FRAND commitments. In response, Qualcomm saidthat it would file an appeal in that matter when the order became final.

Companies: Qualcomm Inc.

MainStory: TopStory Antitrust

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