Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Qualcomm faces antitrust investigation in South Korea, (Nov 18, 2015)

By Linda O’Brien, J.D., LL.M.

U.S.-based semiconductor company Qualcomm Incorporated has confirmed that it received the Case Examiner’s Report (ER) by Korea Fair Trade Commission (KFTC) staff, which commences a process that affords Qualcomm the opportunity to respond to the report’s allegations regarding the company’s patent licensing practices, the company announced yesterday.

The ER alleges that the company does not properly negotiate aspects of its licenses, and that its practice of licensing patents only at the device level and requiring that its chip customers be licensed to its intellectual property violates Korean competition law. The ER proposes remedies including modifications to certain business practices and monetary penalties.

According to a statement released by Qualcomm, “[t]he allegations and conclusions contained in the ER are not supported by the facts and are a serious misapplication of law. 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.”

The statement indicated that the company will defend itself at KFTC hearings and hoped that the agency would reject the conclusions of the Examiner’s Report. Since the process is expected to take some time, the company noted its intention “to continue to invest in leading technologies that drive the industry forward and share those innovations through its licensing program.”

Companies: Qualcomm Inc.

News: Antitrust