[Courtesy of Qualcomm]
US mobile phone chipmaker Qualcomm Inc. warned that an "unprecedented and insupportable" decision by South Korea's anti-trust watchdog could cause a trade dispute with Washington.
The warning came after Qualcomm was slapped with a record fine of 853 million US dollars for abusing its dominant position in South Korea's mobile communications market. The Korea Fair Trade Commission (KFTC) accused the company of breaching a competition act by refusing to offer licenses to chipset makers and demanding high fees for patents used by smartphone makers.
KFTC secretary general Shin Young-sun said the US company deserved a hefty fine for a "very serious" violation of anti-trust rules, dismissing Qualcomm's theory that it has followed market practices. "This is a far-reaching decision affecting the global market," he said, adding the watchdog's ruling would help rejuvenate competition in the mobile phone market.
Qualcomm said it would appeal and file for an immediate stay of the corrective order when it receives a written order. "This is an unprecedented and insupportable decision relating to licensing practices that have been in existence in Korea and worldwide for decades."
"Qualcomm strongly disagrees with the KFTC's announced decision, which Qualcomm believes is inconsistent with the facts and the law, reflects a flawed process and represents a violation of due process rights owed American companies under the Korea-US Free Trade Agreement," the company said in a statement.
Qualcomm's executive vice president and general counsel, Don Rosenberg, accused the watchdog of disregarding the market's "economic realities" and of misapplying "fundamental tenets" of the competition law. "Importantly, this decision does not take issue with the value of Qualcomm's patent portfolio," he said.
For decades, Qualcomm has worked hand in hand with South Korean companies to foster wireless internet growth, Rosenberg said. "Qualcomm’s technology and its business model have helped those companies grow into global leaders in the wireless industry. This decision ignores that win-win relationship."
He slammed the watchdog for rejecting Qualcomm's repeated requests for basic due process rights. "These rights and others are supposed to be guaranteed to US companies under the Korea-US Free Trade Agreement, yet the KFTC declined to implement these fundamental procedural safeguards."
reporter
Park Sae-jin
swatchsjp@ajunews.com
