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Qualcomm to appeal anti-trust fine decision in Taiwan

2017/10/12 10:58:03

Image taken from Qualcomm Facebook page

Taipei, Oct. 12 (CNA) Qualcomm Inc., a U.S.-based smartphone chip designer, said Thursday that it will appeal a decision handed down by Taiwan's Fair Trade Commission (FTC) to slap a more-than NT$23 billion (US$760 million) fine for violation of the country's antitrust regulations.

"The fine bears no rational relationship to the amount 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 U.S. firm said in a statement.

Qualcomm said it is planning to seek a stay on any required measures and appeal the decision to the Taiwanese courts after receiving the FTC's formal decision, which is expected over the next few weeks.

The FTC announced a day earlier that it has decided to impose a fine of NT$23.4 billion on Qualcomm, accusing the U.S. tech giant of violating the country's Taiwan Fair Trade Act by taking advantage of its monopoly status.

The financial penalty will be the heaviest ever handed out to a single company by the Taiwanese antitrust regulator since its establishment in 1991.

The FTC launched an antitrust investigation into alleged Qualcomm violations in February 2015, and after two years of the probe, the commission found the U.S. firm to be involved in direct or indirect behavior to prevent other smartphone designers from competing in the Taiwan market for seven years at least.

According to the FTC, Qualcomm refused to license its technologies to other firms in the Taiwan market, while it commanded a monopoly over the chip market for certain modem technologies that provide wireless data connectivity for mobile phones.

The refusal by Qualcomm, the FTC said, failed to meet the requirement of European Telecommunications Standards Institute, which asked its members to license their technologies to its other market players. The commission said Qualcomm's move undermined innovations in the industry.

According to the FTC, Qualcomm owned a good number of critical standard patents in Code Division Multiple Access (CDMA), Wideband Code Division Multiple Access (WCDMA) and Long Term Evolution (LTE) segments, serving as the dominant provider of CDMA, WCDMA and LTE baseband chips.

During the seven-year period, the FTC said, Qualcomm collected about NT$400 billion in licensing fees in Taiwan after licensing agreements were signed, while Taiwanese buyers paid about an additional NT$30 billion to buy the U.S. firm's baseband chips.

The FTC said that in 15 days after Qualcomm receives a formal legal document on the punishment from the commission, the firm should pay the fine if it does not appeal the decision in a court here.

The commission said Qualcomm will be able to choose to pay the fine in 60 installments over the next five years.

It was the latest blow to Qualcomm in global antitrust probes.

In December, South Korea imposed a fine of US$854 million on Qualcomm for violating its competition laws after another fine of US$975 million was slapped by China for a similar case in 2015.

(By Jackson Chang, Tsai Yi-chu and Frances Huang)