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Results of investigation of Qualcomm’s activities in South Korea
announced in June
06.05.2021 [13:10],
Vladimir Mironenko

South Korea is currently investigating the activities of the American chip manufacturer Qualcomm. The company is rumored to face a massive fine, which will be announced later this year.

A spokesman for the Korean Fair Trade Commission (KFTC) recently confirmed in an interview with local media that an investigation into Qualcomm was conducted, but did not provide any details due to the fact that the investigation was not completed.

As it turns out, the South Korean regulator began its investigation on April 28, 2021. In August, sources say they were sent a request for information (RFI) to Qualcomm. Then on March 5, 2021. KFTC has sent inquiries to Qualcomm’s device and chip makers, customers and competitors who are based in the country or have regional offices here. Their responses were sent to the commission by March 13.

All three of the largest South Korean mobile device manufacturers – Samsung Electronics, LG Electronics and Pantech – are Qualcomm customers. Its main competitors Intel and AMD have offices here.

The regulator conducted an analysis of Qualcomm’s business model for violations of antitrust laws in April. Its results are expected to be published in June. The final decision will be announced within a year.

According to many experts, Qualcomm faces a heavy fine as royalties do not meet the FRAND (fair, reasonable and non-discriminatory) requirements for paying SEP patents (standard core patents).

Qualcomm currently receives royalties from customers based on the cost of the phone, not the price of the chip. According to experts, the company receives in the form of royalties about 5% of sales of smartphones based on its chips.

It is quite possible that KFTC will demand to change the method of calculating royalties and take the cost of the chip as a basis, although it may limit itself only to a fine.

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