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Strategies & Market Trends : Korea

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From: Sam Citron3/12/2009 12:52:02 PM
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Qualcomm Faces South Korea Antitrust Probe [WSJ]

Qualcomm Inc. said antitrust regulators in South Korea are raising complaints about some of the chip maker's business practices.

The San Diego-based company said the Korea Fair Trade Commission issued a case examiner's report containing allegations with respect to the lawfulness of certain practices associated with sales of Qualcomm chipsets, which are widely used in cellphones.

Qualcomm said the practices are related to the "integration of multimedia solutions" into Qualcomm chipsets, as well as "rebates and discounts provided to its chipset customers." A spokeswoman said she could not elaborate about the allegations, noting that the report is confidential.

Qualcomm said the report does not indicate what specific remedies may be sought by the agency. The company added that "Qualcomm believes its actions have been lawful and over the next several months plans to submit its response to the allegations."

South Korea was one of the first markets to make widespread use of Qualcomm's variant of digital cellular technology, known as code division multiple access. Handset makers such as Samsung Electronics Co. and LG Electronics Inc. have been major customers.

Qualcomm disclosed in 2006 that its offices had been visited by officials of the Korean agency, seeking information about seeking information about its dealings with Samsung, LG and Pantech Co. Qualcomm has said it was also named in complaints filed in South Korea by rivals Texas Instruments Inc. and Broadcom Corp.

The company has frequently battled in court with others over its patents and its practices for licensing them, which require handset makers that use its chips to pay royalties. The European Commission has been investigating such issues after complaints from companies there.
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