April 18, 2024

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[THE INVESTOR] Korean and US tech firms are said to have played a key role in the Fair Trade Commission’s probe and decision on Dec. 28 to fine Qualcomm 1.03 trillion won (US$853 million) on antitrust charges.

The FTC was tipped off in 2014 that the US chip giant was abusing its dominant market power in patent licensing deals with chipmakers and smartphone manufacturers.

A special team was set up in February 2015, and investigators started collecting evidence, raiding Qualcomm’s Seoul office in March last year. Among other things, testimonies by Korean and US tech firms were decisive in proving Qualcomm’s decades-old unfair business practices, sources said. 

The FTC interviewed the firm’s key clients ranging from tech giants  Samsung Electronics and LG Electronics to US peers such as Apple, Intel and Nvidia via email several times. The companies also sent their executives to Seoul to testify during the final hearings with commissioners.

“It’s hard to say no when Qualcomm provides the key processor for our devices,” an Apple executives was quoted as saying.

According to the FTC, Qualcomm should have shared more patents with other competitors, including Samsung, Intel and Media Tek. The company also forced smartphone makers to purchase a bunch of licenses, including some they don’t need.

Samsung and LG, alone, are expected to save almost 1 trillion won royalty fees they have been paying Qualcomm every year.

Sources said it unlikely that trade disputes will arise between Korea and the US considering many American firms are benefiting directly from the FTC’s decision.

By Lee Ji-yoon (jylee@heraldcorp.com)