Qualcomm finally gets a legal win in Taiwan

The Qualcomm lawyers are building a reputation as the hardest working in the industry, though at least they no-longer have to battle the Taiwanese Fair Trade Commission.

The resolution of the dispute will come as a welcome relief, allowing the team to focus on other fronts against Apple, the European Commission and various, and the legal team have even saved Qualcomm quite a bit of cash. The deal reverses most of the $773 million fine, though it has agreed to up research commitments in the country.

“We are pleased to have reached a mutually beneficial resolution with the TFTC that puts the litigation behind us,” said Alex Rogers, President of Qualcomm Technology Licensing. “This settlement directly addresses concerns raised by the TFTC, regardless of disputed positions, and builds on our foundation of collaborative, long-term business relationships in Taiwan.

“We are happy to reaffirm our commitment to licensing our valuable intellectual property under principles of fairness and good faith. With the uncertainty removed, we can now focus on expanding our relationships that support the Taiwanese wireless industry and rapid adoption of 5G technology.”

As part of the agreement, Qualcomm will increase its research footprint in the country and has committed to spending $700 million over the next five years. In exchange, Qualcomm will stop getting fined and can continue to charge manufacturers royalties on its technology. The FTC will keep the $89 million Qualcomm has already paid, but will forget about the rest.

It will cost the chip giant cash in the long-term, but this is a minor price to pay in securing a future for its threatened licensing business. This was the major worry for investors, as it is a cash-cow, generating the majority of profits which few would want to see run dry. With Apple recruiting governments around the world in its battle against the licensing business model, this is a certainly a win for Qualcomm.

Qualcomm still faces various antitrust investigations around the world, building an expensive legal bill, but with Taiwan concluding the activities are not monopolistic or abusing market position, it is precedent which Qualcomm can point to.

Taiwan fines Qualcomm $773 million for antitrust violations

US mobile chip giant Qualcomm has been the recipient of yet another fine for claimed anticompetitive business practices.

This time it’s Taiwan, where its Fair Trade Commission has concluded that Qualcomm abused its dominant position in the mobile chip market for at least seven years by refusing to provide products to companies that didn’t agree with its conditions. The ruling itself is currently only published in Taiwanese, so the specifics are sketchy, but it looks like Qualcomm’s dominance is being used against it.

This is part of a growing number of legal actions against Qualcomm for similar reasons. At the end of last year Korea fined Qualcomm $850 million for very similar reasons. Europe is still in the process of investigating the company, the implications of which could be far greater, and Apple is putting its considerable resources into attacking the entire premise behind Qualcomm’s licensing business model.

As with many tech-related antitrust actions, it’s clear that once a company achieves a certain level of market dominance a different set of rules apply to its behaviour. Terms and conditions that would be considered acceptable in a more competitive environment are considered illegal when used by a company that is considered to be dictating the market.

Qualcomm hadn’t returned a request for comment at time of writing but it’s reasonable to assume it will appeal. The even bigger issue at stake for Qualcomm is not just the growing cost of these fines but its very way of doing business. The licensing model means that Qualcomm doesn’t just get revenue from selling its chips (mainly modems), but also a fee for every product sold that contains them. There is a growing movement opposing that model which must have Qualcomm very concerned.