Qualcomm has been fighting to stay the course in a smartphone market that's cooled down globally, and a new, very large fine from the South Korean antitrust regulator isn't going to help things.
The Korea Fair Trace Commission has officially levied a 1.03 trillion won, or $854 million, fine on Qualcomm because of unfair business practices and patent licensing deals. It doesn't matter how big of a company you are, losing nearly $1 billion to a fine is going to sting.
The KFTC said Qualcomm abused its position in the wireless market to force companies to license for an unnecessary number of features related to Qualcomm's modem chips. And since Qualcomm is easily the biggest wireless modem manufacturer, they were impossible to say no to.
Qualcomm also refused to license some of their essential patents to competitors like Intel, Samsung, and MediaTek to help maintain their dominant position in the modem market. Definitely not a good look.
The regulator wants Qualcomm to renegotiate its current patent licenses and chip supply agreements with other manufacturers, which should helpfully create a better environment for everyone else and potentially bring a little more competition to the market. Qualcomm makes good modems, but it'd be better to see how things stood without unfair practices hurting competitors.
China already dinged Qualcomm with an even bigger fine in 2015, and regulators in the US and Taiwan are also actively looking into the company. Things are about to heat up for Qualcomm, or we'll see some serious diversity in mobile modems in 2017 and beyond. Take your pick.
source: Reuters
