Qualcomm settles licensing dispute with Taiwan’s competition regulator
Semiconductor company Qualcomm has reached a settlement with the Taiwan Fair Trade Commission (TFTC), following a competition dispute which resulted in a NT$23.4 billion (US$774 million) fine against the company.
Qualcomm announced the resolution yesterday, August 9.
Last October, the TFTC said that Qualcomm had a monopoly over the chip market for several modem technologies and had refused to license its technology to “other industry players”, in violation of Taiwan’s Fair Trade Act.
Around the same time, the TFTC cleared wireless technology provider InterDigital of any wrongdoing following an investigation into the company’s patent licensing.
The TFTC issued a $774 million fine against Qualcomm, and the company announced its intention to appeal against the ruling immediately.
“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,” the company said in a statement at the time.
As part of the agreement reached earlier this week, the TFTC’s investigation into Qualcomm and the company’s legal challenge against the TFTC’s decision at the Taiwan IP Court have been dropped.
The agreement does not require component-level licensing or set financial terms, according to Qualcomm.
Qualcomm said the settlement instead relates to “certain process-related commitments confirming principles of mutual good-faith and fairness in the negotiation of agreements with handset licensees to Qualcomm’s cellular standard-essential patents”.
The parties have agreed that the $93 million of the $774 million fine already paid by Qualcomm will be retained by the TFTC, and no further payments are due.
As part of the deal, Qualcomm will “drive commercial incentives in Taiwan” for the benefit of the mobile and semiconductor industries over the next five years. This includes the pursuit of 5G collaborations, market expansion, and university collaborations.
Qualcomm will also work with the TFTC to implement these initiatives and investments.
Alex Rogers, executive vice president and president of Qualcomm’s technology licensing division, said the settlement “directly addresses” the concerns raised by the TFTC.
He added: “We are happy to reaffirm our commitment to licensing our valuable IP under principles of fairness and good faith. With the uncertainty removed, we can now focus on expanding our relationships that support the Taiwanese wireless industry and rapid adoption of 5G technology.”
Earlier this year, the European Commission fined Qualcomm €997 million ($1.4 billion) for violating EU competition law. The fine, which represented 4.9% of Qualcomm’s turnover in 2017, resulted from the company shutting out rivals to assert market dominance.
And last year, the US Federal Trade Commission sued Qualcomm for using anti-competitive tactics in the supply of key semiconductor devices used in mobile phones and other consumer products.
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