Qualcomm likely to lose case against Korea's antitrust agency

By Baek Byung-yeul

Kwon Oh-hyung, president of Qualcomm Korea

Qualcomm will likely lose its ongoing legal battle with Korea's antitrust agency as a U.S. court ruled against the U.S, smartphone chipmaker, finding it abused its dominant market position and engaged in unfair business practices, according to industry analysts Thursday.

The latest ruling came Tuesday (local time), after the U.S. Federal Trade Commission (FTC) filed a lawsuit against Qualcomm in 2017. The FTC filed the complaint with the federal district court accusing Qualcomm of abusing its dominant position and wielding unfair licensing practices.

A U.S. federal judge issued a ruling Tuesday in favor of the FTC and ordered the firm to renegotiate patent licensing agreements with its customer companies.

In 2016, the Korean antitrust agency imposed a 1.03 trillion won ($865 million) fine on Qualcomm, saying the U.S. firm violated antitrust regulations by utilizing its market dominance to keep competitors from entering the market. Qualcomm in response filed a complaint with the Seoul High Court and the ruling is expected to be made this year.

“The U.S. ruling on Qualcomm may affect the ruling of the Korean court. I think chances are the local court would favor the antitrust agency,” said Park Jun-seok, a patent attorney at MAPS Intellectual Property Law Firm.

An image of Qualcomm’s Snapdragon 855 mobile chip / Courtesy of Qualcomm Korea

Given the world's largest maker of smartphone chipsets and modems has also been in a legal dispute with the Fair Trade Commission (FTC) here, a local patent attorney said the U.S. ruling will have a negative impact on the U.S. chip design firm as the local court will likely use it as a reference.

“Though the judiciary must be independent and transparent in executing its mandate, they will try to refer to the ruling because the case is not only for the U.S. firms but many other phone manufacturers in the world,” Park said.

A securities analyst said the antitrust ruling against Qualcomm in the U.S. may benefit phone manufacturers and consumers.

“Though Qualcomm decided to appeal the U.S. ruling, it won’t have an immediate effect on the industry but if Qualcomm renegotiates the licensing fee with manufacturers, companies like Samsung Electronics can lower the price of their devices,” said Ryu Young-ho, an analyst at Mirae Asset Daewoo Securities.

Regarding the legal dispute with the FTC here, a Qualcomm Korea spokeswoman told The Korea Times that “there is nothing to comment on.”

Qualcomm disagreed with the ruling and added it will “immediately seek a stay of the district court's judgment and an expedited appeal to the U.S. Court of Appeals.”

“We strongly disagree with the judge's conclusions, her interpretation of the facts and her application of the law,” said Don Rosenberg, executive vice president and general counsel of Qualcomm.