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Qualcomm brands $774M Taiwan fine irrational

12 OCT 2017

Qualcomm announced it will contest a TWD23.4 billion ($774 million) fine levied by the Taiwan Fair Trade Commission (TFTC) relating to its sale of mobile phone chips and licensing of standards-essential patents.

The TFTC said Qualcomm’s business methods breached local competition laws because the company effectively holds a monopoly in the space. The TFTC believes Qualcomm breached the rules for at least seven years, garnering TWD400 billion in licensing fees and revenue of $30 billion in baseband chip sales from Taiwan-based companies, Bloomberg reported.

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In a statement, Qualcomm said it will argue its case in Taiwan’s courts and seek a stay of the fine and other “behavioural measures” once the TFTC issues a formal ruling in the coming weeks.

“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,” the company stated.

Despite its combative tone, the decision is the latest in a series of rulings against Qualcomm related to its business model.

In early 2015 the company agreed to modify its licensing practices in China after being fined CNY6.1 billion ($925 million) for breaching the country’s anti-monopoly law.

South Korean competition regulator, the Korea Fair Trade Commission, levied a record KRW1.03 trillion ($909 million) fine on Qualcomm in late 2016 for abusing its dominant position by linking modem sales to patent licensing agreements. Qualcomm swiftly appealed the decision, though ultimately the move was rejected by the Seoul High Court.

Samsung and Intel took aim at the company in mid-May, contributing arguments to a US Federal Trade Commission complaint claiming Qualcomm uses anticompetitive tactics to maintain a monopoly in smartphone chips. In a separate move in late May, Qualcomm agreed to pay $940 million to BlackBerry relating to an allegation the company overcharged on royalties.

Qualcomm is also embroiled in an ongoing, high profile, patent licensing spat with Apple.

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Michael Carroll

Michael doesn’t want to admit that he has been a journalist and editor for close to 20 years covering a diverse set of subjects including shipping and shipbuilding, fixed and mobile telecoms, and motorcycling...More

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