After paying the piper in China, Qualcomm may be facing a similar shakedown in South Korea

After paying the piper in China, Qualcomm may be facing a similar shakedown in South Korea
A number of companies with foreign operations in China have been coming under scrutiny over “anti-trust” issues or allegations of monopolistic business practices. Microsoft is currently getting plenty of attention at the moment, but Qualcomm has emerged from over a year of “investigations” alleged price-fixing, resulting in the company agreeing to a $1 billion settlement.

The fine is not going to break the company, but the whole affair has prompted Qualcomm to adjust its earnings forecast down a little bit for the year.

Now that China is settled however, it appears South Korea may be next in line to consider Qualcomm’s dominance in the market for an investigation. There was no comment from South Korea’s Fair Trade Commission, but local media is reporting that an investigation is already underway, focusing on whether Qualcomm’s collection of royalty payments for its patents violated Korean anti-trust regulations.

Unfortunately, South Korea is certainly not going to be the last market to bring up this issue in the wake of Qualcomm’s capitulation to China. The settlement with China is sure to swing the gates open in other markets where Qualcomm is successful. The deal in China had little to do with Qualcomm’s actual chips, but the licensing fees where Qualcomm makes most of its revenue, and that is where South Korea is apparently looking to make a grab.

What does this mean to the other companies under investigation in China? We suspect it may depend on how big a check they have to write. Just as in China, Qualcomm is highly successful in Korea, and around the world. That seems to be the common denominator, and may be the common attraction for other “investigations.”

sources: The Wall Street Journal and Investors Business Daily

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9 Comments

1. rockers123

Posts: 137; Member since: Sep 08, 2013

What is anti-trust?

3. vincelongman

Posts: 5814; Member since: Feb 10, 2013

anti-trust laws are basically laws to do with competition and anti-monopoly They are supposed to sustain competition and prevent companies from being anti-competitive Some say Qualcomm has a monopoly over the high end SoC market and LTE patents, not really sure on this though

7. renz4

Posts: 319; Member since: Aug 10, 2013

i think it is more about their radio tech but it could be extended to their soc. i heard that qualcomm will not going to let other company to license some of their modem unless you're going to get it with their snapdragon package. this in the end forcing most phone OEM to use their snapdragon in their flagship device. samsung exynos did use qualcomm modem in the past. but for the much more recent exynos samsung were licensing their modem from intel.

8. 14545

Posts: 1835; Member since: Nov 22, 2011

But this doesn't make sense. It's not like there aren't other chip makers out there with LTE. I get how it's kinda shady to force people to buy your whole product, instead of just bits. But it's their product. However, this does speak to how BS the patent system is(not just in the US). I mean having a monopoly means there are no other players in the market. Which is certainly not true. You have apples own chips, mediatek, samsung.... So this just reeks of a money grab by the Chinese government.

9. renz4

Posts: 319; Member since: Aug 10, 2013

Part of it maybe you need to ask phone make themselves why their modem must be from qualcomm. Intel for their part did license their modem to others (like samsung) but it seems other phone manufacturer are not interested with it. For mediatek i 'm not sure if they ever license their modem stuff but even as SOC they only play on the low end game. Mid range at the best. So it turn most people to qualcomm if they want something for their flagship device. For apple even if they make their own soc their modem are still from qualcomm. Probably the only phone maker that qualcomm cant force to get their snapdragon package.

2. itsdeepak4u2000

Posts: 3718; Member since: Nov 03, 2012

Qualcomm feeling the heat.

4. Kumar123 unregistered

Oh, boy. Poor Qualcomm. I guess Samsung is serious about their Exynos chipset otherwise they wouldn't pull this kind of string behind the scene.

5. hohoho

Posts: 65; Member since: Dec 12, 2014

hurrr

6. joey_sfb

Posts: 6794; Member since: Mar 29, 2012

How did you know? Samsung is still in line to release phone with Snapdragon 810. A large portion of their manufacturing capacity has already been booked by Apple.

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