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April 22, 2019

Supreme Court rules in favor of FTC in decade-old battle with Qualcomm

PUBLISHED : February 12, 2019 - 16:05

UPDATED : February 12, 2019 - 16:05

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US chipmaker Qualcomm has lost a lawsuit against the Fair Trade Commission, the nation’s antitrust watchdog, over unfair practices to maintain a monopoly in the local mobile communications chip segment in 2009.

The Supreme Court on Feb. 11 found most of the FTC decisions in 2009 to impose a total of 273 billion won (US$242 million) worth of fines on Qualcomm for illegal kickbacks from 2000 to 2009 to be lawful.




Of the 273 billion-won penalty, the court ruled the chipmaker should pay at least 200 billion won, while the remainder needs be reconsidered at a lower court.

Qualcomm, which supplies communications chips to Korean smartphone makers like Samsung Electronics and LG Electronics, has been criticized for giving away incentives to smartphone companies that used more than a certain amount of the chip provider’s mobile communications and radio frequency chips. Such a practice, the court said, forced mobile phone companies not to receive chips from Qualcomm’s rivals. The kickbacks handed to the phone makers in 2000-2009 amounted to millions of dollars per quarter.

Qualcomm has not made an announcement regarding the latest court’s ruling, with a spokesperson of the Korean office saying that there is “nothing to say at the moment.”

Customarily, two rounds of trials are held separately by a high court and the Supreme Court to handle lawsuits protesting FTC decisions.

In the first trial held in 2013, the Seoul High Court ruled in the watchdog’s favor, saying the chip company’s kickbacks prevented Korean phone makers from inking business deals with other chip producers.

Some market watchers believe the latest Supreme Court ruling could affect a separate legal fight between the US chipmaker and the FTC. In 2016, the watchdog decided to levy 1.03 trillion won on Qualcomm for utilizing its market dominance to keep competitors from entering the market and maintain a monopoly. In response, the chip manufacturer filed a complaint with the Seoul High Court.

By Kim Young-won (wone0102@heraldcorp.com)

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