In the recent ongoing court litigation with Apple,Taiwan Fair Trade Commission The Fair Trade Commission (hereinafter referred to as the Fair Trade Commission) fined Qualcomm NT$9 billion for violating Article 1, Paragraph 234 of the Fair Trade Act, setting a record for the highest fine in the history of the Fair Trade Commission.
The Fair Trade Commission stated that Qualcomm, leveraging its advantage in holding standard patents in mobile communications technology, refused to provide competitors with necessary technology patent licenses, thereby increasing costs for both mobile phone manufacturers and their competitors. It also required mobile phone manufacturers not to provide baseband chips for seven years unless they cooperated in signing patent licensing agreements. During this period, the total licensing amount collected in Taiwan amounted to approximately NT$7 billion. At the same time, Taiwanese manufacturers purchased baseband chips from Qualcomm for approximately NT$4000 billion. The Commission believed that Qualcomm's illegal activities resulted in profits of approximately NT$300 million. Furthermore, Qualcomm's illegal activities also affected the market development of baseband chips for standard technologies such as CDMA, WCDMA, and LTE. Therefore, the commission decided to impose a fine of NT$1 billion, the highest fine since the establishment of the Fair Trade Commission.
In addition to imposing a high fine, the Fair Trade Commission also required Qualcomm to terminate the contractual terms currently signed with chip competitors that require the company to provide sensitive distribution information such as chip prices, sales targets, sales quantities, and product models. It also required Qualcomm to terminate the contractual terms signed with mobile phone manufacturers that prohibit the supply of chips without authorization, and to terminate the exclusive transaction discount terms signed.
In addition, the Fair Trade Commission also requires Qualcomm to notify chip competitors and mobile phone manufacturers in writing within one month, and agrees that chip competitors and mobile phone manufacturers may submit offers to Qualcomm for amendments or new patent technology licenses and other related contracts within 60 days of receiving the notice. Qualcomm must negotiate in good faith and on the basis of mutual trust upon receiving the offer. At the same time, Qualcomm must proactively report the results of each negotiation to the Fair Trade Commission within every six months from the day after the disciplinary notice is delivered, and must also report to the Fair Trade Commission within 6 days after the completion of the amendment or signing of the new contract.
Qualcomm has yet to respond to this question, but market speculation suggests the Fair Trade Commission's fine is related to Apple's lawsuit against Qualcomm this year over patent licensing disputes. Qualcomm has also previously been investigated and fined in China over patent licensing disputes, subsequently reaching a settlement with Chinese mobile phone manufacturers and re-signing licensing agreements. Qualcomm is also facing a market monopoly investigation in South Korea.
