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South Korea hits Qualcomm with antitrust fine

The chipset manufacturer has been fined a record £127m by South Korea's Fair Trade Commission, for giving discounts and rebates to handset makers that avoid competitors' products
Written by David Meyer, Contributor

Chipset manufacturer Qualcomm has been fined a record amount by South Korea's Fair Trade Commission for antitrust violations.

The 260bn won (£127m) fine — the largest-ever levied by the KFTC — was imposed on Qualcomm for anti-competitive practices. These include providing discounts and rebates to South Korean mobile-phone manufacturers that mainly use Qualcomm chips in their handsets. The fine was accompanied by an order to stop the practices in question, which are seen as harming smaller, rival chipset manufacturers.

Qualcomm said in a statement on Thursday that it "firmly disagrees with the KFTC decision that certain discounts and rebates it provides to its Korean customers on the purchase of its CDMA chipsets are in violation of Korean competition law". The chipset maker said it will file an appeal against the fine.

The US company also called the fine "excessive and unwarranted", and said there was no indication of how the KFTC arrived at the figure of 260bn won.

South Korea is home to some of the world's largest handset manufacturers, notably Samsung and LG. In its statement, Qualcomm said it was "very proud of the long-standing, mutually beneficial relationships [Qualcomm has] enjoyed with the Korean wireless industry [and] the discounts and rebates which have been characterised as violating competition law were put in place for the benefit of Korean handset manufacturers".

Qualcomm has had several other run-ins with antitrust regulators around the world. The European Commission began an investigation into its practices in 2007, but that probe ended last year when Nokia, the chief complainant, settled with Qualcomm.

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