Qualcomm Inc. appealing $856 million fine from Korea Fair Trade Commission

SAN DIEGO (KUSI) — San Diego-based Qualcomm Inc. intends to appeal a recent Korea Fair Trade Commission decision that its business practices violated Korean competition laws, and an associated $865 million penalty. In a statement issued late Tuesday, Qualcomm officials called the ruling, which pertains to its patent licensing practices, "unprecedented and insupportable." The smartphone technology producer said the trade commission’s ruling sought to disrupt accepted practices, which were also used by Korean wireless industry companies such as Samsung and LG.

Qualcomm officials said the Korean regulatory agency’s investigation lacked evidence of harm to other chip and handset suppliers, and contend competition is "robust" in part because Qualcomm’s business model promotes competition. "For decades, Qualcomm has worked hand-in-hand with Korean companies to foster the growth of the wireless Internet," said Don Rosenberg, Qualcomm’s executive vice president and general counsel. "Qualcomm’s technology and its business model have helped those companies grow into global leaders in the wireless industry. This decision ignores that win-win relationship."

The trade commission’s decision will take effect once a written decision and corrective order is issued, which typically takes four to six months, according to Qualcomm.

Company officials intend to file for a stay of the order and appeal the trade commission’s decision to the Seoul High Court. Qualcomm also objects to the amount of the fine and the method used to calculate it, and said the amount was not reasonably related to the size of the Korean market. Qualcomm will be required to pay the fine within 60 days of the issuance of the written order, but it could be adjusted or refunded as part of the appeal process, according to company officials.