Korea's Fair Trade Commission (FTC) on July 23 fined Qualcomm, the world’s largest mobile phone chip supplier, W260 billion (US$208.5 million) for unfair practices.
This is the largest fine ever levied by the antitrust regulator on businesses, more than double the W113 billion (US$90.6 million) levied on KT in 2005.
The FTC said since April 2004, when licensing its CDMA mobile technology, Qualcomm imposed a 5.75 percent royalty on mobile phone makers like Samsung Electronics, LG Electronics and Pantech if they used modem chips provided by rivals, but a mere 5 percent royalty if they used Qualcomm modem chips. Qualcomm has been providing handset makers with original CDMA technology.
Qualcomm's unfair trading practices have restricted its rivals, such as VIA of Taiwan and EoNex of Korea, from making inroads into the domestic modem chip market. And it has maintained a near monopoly on the CDMA market with a 99.4 percent market share over more than a decade, the FTC added.
Qualcomm is the third multinational firm that has been fined by the Korean antitrust regulator, following MS and Intel. MS was fined W32.4 billion (US$26 million) in February 2006 for tie-in sales of media players for Windows, and Intel was fined W26 billion (US$20.9 million) in June 2008 for providing rebates.
