The Korea Fair Trade Commission (KFTC) ruled on Wednesday Qualcomm abused its dominant market position and forced handset makers to pay royalties for an unnecessarily broad set of patents as part of sales of its modem chips.
Qualcomm also restricted competition by refusing or limiting licensing of its standard essential patents related to modem chips to rival chipmakers such as Intel Corp, Samsung Electronics Co Ltd and MediaTek Inc, the regulator said, hindering their sales and leaving their products vulnerable to lawsuits.
The regulator ordered Qualcomm to negotiate in good faith with rival chipmakers on patent licensing and renegotiate chip supply agreements with handset makers if requested - measures that would affect the U.S. firm's dealings with major tech companies including Apple Inc, Intel, Samsung and Huawei Technologies Co Ltd if upheld.
The KFTC said it began its investigations into Qualcomm's practices in 2014 following complaints from industry participants, but did not name specific companies.
Foreign companies including Apple, Intel, MediaTek and Huawei expressed their views during the regulator's deliberation process, KFTC Secretary General Shin Young-son told a media briefing in the country's administrative capital.
"We investigated and decided on these actions because Qualcomm's actions limit overall competition," Shin said, adding that the ruling was not about protecting domestic companies such as Samsung and LG Electronics Inc but about improving market competition for all players.
Qualcomm said it will file for an immediate stay of the corrective order and appeal the decision to the Seoul High Court. The firm will also appeal the amount of the fine and the method used to calculate it.
"Qualcomm strongly disagrees with the KFTC's announced decision," it said in a statement.