Shulou(Shulou.com)11/24 Report--

CTOnews.com, April 13 (Xinhua) South Korea's Supreme Court on Thursday rejected an appeal by US chip giant Qualcomm and its two subsidiaries, upholding the record fine of 1.03 trillion won (CTOnews.com Note: about 5.356 billion yuan) imposed by South Korea's antitrust regulators. The fine was imposed because Qualcomm abused its dominant position in the smartphone market to engage in unfair business practices against handset makers.

"under the Fair Trade Law, we have reconfirmed and clarified the criteria for judging whether the dominant position is abused, that is, whether it unreasonably causes difficulties to the operation of other enterprises, such as imposing unreasonable terms and conditions, or exerting adverse effects," Tuyuan Pixabay South Korea's Supreme Court said.

In 2016, the Korea Fair Trade Commission dealt with Qualcomm's monopoly behavior of excluding and restricting competition by abusing its dominant market position, imposed a fine of 1.0311 trillion won and ordered it to correct. The committee believes that Qualcomm holds the necessary patents for mobile communications standards (SEP) necessary for the production of mobile phones, which links the supply of modem chipsets to patents and stipulates that "high-pass chips" cannot be used without paying royalties, in effect restricting the use of patent rights. Qualcomm also charges patent licensing fees from mobile phone manufacturers and even "bundles" chips and patent licenses, forcing them to sign unnecessary patent contracts or taking a percentage of the price of the whole phone.

The Korea Fair Trade Commission welcomed the Supreme Court's upholding the $1 billion fine and correction order against Qualcomm, saying in a statement on Thursday: "although the license agreement itself was not found illegal this time, but it clearly established an anti-competitive commercial structure in the standard essential patent market and the modem chip market in order to maintain and expand its monopoly position. It makes sense to monopolize the market structure by creating a competition restriction effect in the relevant markets. "

The Korea Fair Trade Commission said it planned to carefully examine the implementation of the corrective order and deal harshly with unfair restrictions on competition in the light of the ruling.

According to CTOnews.com, it took nearly nine years to close the case after the Korea Fair Trade Commission began investigating Qualcomm's practices in 2014. After receiving complaints from industry participants, the committee began to investigate whether Qualcomm violated South Korea's competition law, refused to grant licenses to chipmakers and charged higher fees to smartphone makers that use its patents.

Qualcomm has been charging handset makers that buy its modem chips 5 per cent of the price of their phones as royalties for CDMA technology, including Samsung, MediaTek and Intel.

Regulators also issued a corrective order requiring Qualcomm not to sign terms against customers.

However, Qualcomm denies restricting the use of patents by handset makers by restricting sales channels. In February 2017, Qualcomm called the Korea Fair Trade Commission's ruling "unprecedented and untenable" and appealed the case to the Seoul High Court. But the court confirmed some of the corrective measures proposed by antitrust regulators, including requiring Qualcomm to stop discriminating against competitors who seek to use its mobile basic patents and develop competitive modem chips for use by smartphone makers.

This is the first time since its establishment in 1981 that South Korean regulators have imposed fines of more than 1 trillion won in a single case. In 2009, the Korea Fair Trade Commission also fined Qualcomm 27.23 billion won for abusing its dominant market position in South Korea.

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