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Qualcomm appeals: dissatisfaction court maintains South Korean government $ 870 million antitrust fine

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Editor’s note: This article is from Tencent Technology, reviewed by Cheng Xi, and published with permission from 36 氪.According to foreign media reports, on December 4, a South Korean court ruled that it supports the South Korean government’s antitrust agency in issuing a US $ 870 million fine on Qualcomm.Subsequently, Qualcomm stated that it could not agree with the ruling and would appeal to a higher court to seek a statement.That day, the ruling of the Seoul High Court was a setback for Qualcomm.In many places around the world, Qualcomm has been subject to a series of investigations and penalties for monopolies in telecommunications patents and mobile phone chip sales.The US Federal Trade Commission also sued the company for market monopoly.On the same day, South Korean judge Noh Tae-ak rejected Qualcomm’s appeal against the penalties imposed by the Korean Fair Trade Commission in 2016, saying that Qualcomm abused its dominant market position.”The defendant exerted significant influence on the handset maker through an unfair partnership or having the handset maker rely on the modem chipset provided by the defendant,” said the judge in his ruling.The court also supported some remedies proposed by the Korean Fair Trade Commission, including asking Qualcomm to stop discriminating against certain competitors who use its basic mobile communications patents, allowing them to develop smartphone modem chips that compete with Qualcomm.However, the Seoul High Court rejected some of the allegations made by regulators that Qualcomm has signed a “full” license agreement, putting smartphone manufacturers at a disadvantage because Qualcomm can continue to “get a share” from the price of mobile phone sales.Qualcomm executive vice president Don Rosenberg said in a statement: “We do not agree with the court’s support for some of the Korean Fair Trade Commission’s rulings and will immediately seek to appeal those rulings to the South Korean Supreme Court.” Qualcomm saidQualcomm is pleased that the court reversed the South Korean antitrust agency’s order for Qualcomm to renegotiate the patent licensing agreement.The Korean Fair Trade Commission declined to comment on whether an appeal would be filed.Qualcomm is the world’s largest supplier of mobile phone chips. Most of its profits come from the department that invents patented telecommunications technology and obtains revenue through patent licensing.According to the adjusted data, the company forecasts that the revenue of the telecommunications patent licensing department in the first fiscal quarter of the new fiscal year will be between 1.3 billion and 1.5 billion US dollars, which is higher than analysts’ expectations.Qualcomm’s chips are an important component of many mobile devices and are also used in products from South Korean smartphone makers Samsung Electronics and LG Electronics.There are signs that Qualcomm has maintained a strong market position even after the South Korean Fair Trade Commission imposed penalties.Since then, Qualcomm has expanded its strategic relationship with global smartphone leader Samsung and signed a new five-year patent license agreement with LG in August.”This antitrust ruling will not really affect or weaken Qualcomm’s market position, as we are entering the 5G era. Qualcomm is one of the few companies capable of manufacturing 5G modem chips.1. Mobile phone manufacturers and telecommunications companies will still have to rely heavily on Qualcomm’s products, regardless of whether they have so-called unfair business practices. “