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Taiwan fines Qualcomm $773 million for antitrust violations

Qualcomm Snapdragon 630_660

US mobile chip giant Qualcomm has been the recipient of yet another fine for claimed anticompetitive business practices.

This time it’s Taiwan, where its Fair Trade Commission has concluded that Qualcomm abused its dominant position in the mobile chip market for at least seven years by refusing to provide products to companies that didn’t agree with its conditions. The ruling itself is currently only published in Taiwanese, so the specifics are sketchy, but it looks like Qualcomm’s dominance is being used against it.

This is part of a growing number of legal actions against Qualcomm for similar reasons. At the end of last year Korea fined Qualcomm $850 million for very similar reasons. Europe is still in the process of investigating the company, the implications of which could be far greater, and Apple is putting its considerable resources into attacking the entire premise behind Qualcomm’s licensing business model.

As with many tech-related antitrust actions, it’s clear that once a company achieves a certain level of market dominance a different set of rules apply to its behaviour. Terms and conditions that would be considered acceptable in a more competitive environment are considered illegal when used by a company that is considered to be dictating the market.

Qualcomm hadn’t returned a request for comment at time of writing but it’s reasonable to assume it will appeal. The even bigger issue at stake for Qualcomm is not just the growing cost of these fines but its very way of doing business. The licensing model means that Qualcomm doesn’t just get revenue from selling its chips (mainly modems), but also a fee for every product sold that contains them. There is a growing movement opposing that model which must have Qualcomm very concerned.

 

UPDATE – 0900 12/10/17: Qualcomm has issued the following press release as it’s response.

Qualcomm Disagrees with Decision by Taiwan Fair Trade Commission and Intends to Seek a Stay and Appeal the Decision

SAN DIEGO — October 11, 2017 — Qualcomm (Nasdaq: QCOM) today announced that the Taiwan Fair Trade Commission (TFTC) has reached a decision in the TFTC’s investigation, stating in a press release that certain of the Company’s business practices are in violation of Taiwanese competition law and imposing a fine of approximately $23.4 billion Taiwan dollars (approximately $773 million US dollars at current exchange rates). Qualcomm disagrees with the decision summarized in the TFTC’s press release and intends to seek to stay any required behavioral measures and appeal the decision to the Taiwanese courts after receiving the TFTC’s formal decision, which is expected in the next several weeks. The fine bears no rational relationship to the amount of Qualcomm’s revenues or activities in Taiwan, and Qualcomm will appeal the amount of the fine and the method used to calculate it.


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