South Korea debates Qualcomm antitrust probe

South Korea is considering joining other countries by launching an antitrust investigation against the US chip maker.
Written by Charlie Osborne, Contributing Writer
South Korea is mulling over a potential antitrust investigation into chip maker Qualcomm, days after China slammed the company with a $975 million fine.

Local news agency Yonhap reports that South Korean antitrust regulators are considering launching an investigation into "possible abuse of its market dominant position," according to unnamed officials and market sources.

The publication says that South Korea's Fair Trade Commission (FTC) is scrutinising Qualcomm's patent business practices. Qualcomm's "reverse patent license" business model, at the heart of the matter, enforces a compulsory requirement for companies using Qualcomm chips in devices to "authorise their patent rights to Qualcomm" and forbids them from collecting royalty payments from other Qualcomm clients.

An unnamed official at the FTC said:

"The FTC as a rule maintains a 'neither confirm nor deny' policy on any prospective probe, but we are weighing all the options available."

However, the antitrust official did say the FTC is "carefully examining actions taken by China" to decide if similar activities have taken place in South Korea -- and whether the country should follow suit.

"If a probe is started, it will be a long, drawn-out affair that could take two to three years," he said.

This week, Qualcomm confirmed the ruling of Chinese antitrust regulators, which resulted in a fine of $975 million over the firm's patent and royalty practices -- a decision Qualcomm says it will not appeal.

Qualcomm also agreed to tweak its business practices in China, starting with offering licenses to its current 3G and 4G Chinese patents separately from licenses to its other patents, but most importantly, the US chip maker has agreed to provide existing licensees in China with the choice to accept or decline the new terms on sales of devices from 1 January, 2015.

Following the end of the 14-month antitrust probe, Qualcomm altered its outlook for the fiscal year, projecting revenue to fall between $26.3 billion and $28.0 billion -- a slight increase on estimates.

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