Qualcomm fined $774 million by Taiwan for abusing monopoly on smartphone modems
On Wednesday 11 October, Taiwan's Fair Trade Commission (FTC) said that Qualcomm, maker of Snapdragon processors, abused its monopoly over smartphone modems. This was done to get higher licensing fees and better terms from those who buy its products. Taiwan's FTC fined Qualcomm a record $774 million. This is the latest blow from regulators.
Taiwan isn't the first country to go after Qualcomm over its expensive licensing terms. In the past two years, both South Kore and China have fined the company. Japan and the European Union are also looking into its practices. Over in the USA, Apple is engaged in a series of global lawsuits that cover many of the same practices. Since the battle with Apple, Qualcomm has lost billions of dollars in payments. The US's FTC is also suing Qualcomm for the same reasons.
The rights to a large number of radio technologies that are absolutely essential to any smartphone in this day and age are owned by Qualcomm. Apple has alleged for years that the chipmaker has been over-charging them because of their monopoly. This Taiwan FTC fine will undoubtedly be a boost for Apple in its battle with the chipmaker.
Qualcomm has been violating antitrust rules for the past seven years. In that time, the company has collected about $13 billion in licensing fees from local companies. The Taiwan FTC had this to say over on its website, "Qualcomm holds a big number of standard essential patents in CDMA, WCDMA and LTE segments and is the dominant provider of CDMA, WCDMA and LTE baseband chips. It abused its advantage in mobile communication standards, refused to license necessary patents". The FTC also said that Taiwanese companies purchased $30 billion worth of Qualcomm chips. It now has to end this practices and possibly reverse some of the terms of the unfavourable deals it signed with many companies.
Qualcomm has disagreed outright with the ruling. The company intends to appeal after receiving the Taiwan FTC's formal decision. The formal decision is expected in the next several weeks. "“The fine bears no rational relationship to a number 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 said in a statement.