Qualcomm confirmed Tuesday it is under investigation by South Korean regulators for violations of the country’s fair trade rules.
According to Qualcomm, a Case Examiner’s Report submitted to South Korea’s Fair Trade Commission alleges that the company does not properly negotiate technology licenses. The report further alleges the company’s practice of licensing patents at the device level only and requiring customers are licensed to Qualcomm’s intellectual property violate the country’s competition laws.
The regulator’s report proposes both fines and enforcing changes to Qualcomm’s business practices as a remedy, the company said.
“The allegations and conclusions contained in the ER are not supported by the facts and are a serious misapplication of law,” Qualcomm said in a statement. “Our patent licensing practices, which we and other patent owners have maintained for almost two decades, and which have facilitated the growth of the mobile communications industry in Korea and elsewhere, are lawful and pro-competitive. Device level licensing is the worldwide industry norm, and Korean companies have long enjoyed the benefits and protections of access to our patents, which cover essentially the entire device.”
Qualcomm said it plans to “vigorously” defend itself against the allegations and said it will “remain hopeful that the Commission will reject the conclusions of the Examiner’s Report.”
The investigation is expected to take “some time,” Qualcomm said, but did not specify exactly how long.
This isn’t Qualcomm’s first run in with anti-trust regulators. In February, the company agreed to pay a $975 million settlement and follow a rectification plan in China in the face of monopoly allegations.
As of 10:50 a.m. Wednesday, Qualcomm stocks were down almost 9 percent on the news.
Filed Under: Industry regulations