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South Korea is investigating Qualcomm

Antitrust the topic, as it was in China

The publication androidheadlines.com is reporting that, according to an unnamed source in South Korea's Trade Commission, Qualcomm is under investigation by that country. This was first reported by Maeil Business Newspaper of South Korea. The investigation is reportedly about Qualcomm's potential abuse of its dominant position as the top mobile chip maker.

On February 10, Qualcomm agreed to pay China $975 million, the largest fine in China's history, over antitrust issues related to China's 2008 anti-monopoly law. The fine ended a 14-month-long investigation, and Qualcomm's stock rose as the uncertainty evaporated. The agreement also required Qualcomm to lower its royalty rates on patents used in China, according to Reuters.

One of the risks of settling an antitrust matter with one country is that another country will follow suit. Qualcomm had no comment on the matter.

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The publication androidheadlines.com is reporting that, according to an unnamed source in South Korea's Trade Commission, Qualcomm is under investigation by that country. This was first reported by Maeil Business Newspaper of South Korea. The investigation is reportedly about Qualcomm's potential abuse of its dominant position as the top mobile chip maker.

On February 10, Qualcomm agreed to pay China $975 million, the largest fine in China's history, over antitrust issues related to China's 2008 anti-monopoly law. The fine ended a 14-month-long investigation, and Qualcomm's stock rose as the uncertainty evaporated. The agreement also required Qualcomm to lower its royalty rates on patents used in China, according to Reuters.

One of the risks of settling an antitrust matter with one country is that another country will follow suit. Qualcomm had no comment on the matter.

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Comments
9

If the situation was reversed the aforementioned countries would just thumb their noses at us and we stupid Americans would just continue to buy their cheap imported goods.

Feb. 13, 2015

AlexClarke: We do not enforce our antitrust laws in the United States. Mergers between American companies that appear blatantly anti-competitive breeze through without serious study of the possible consequences. When an anticompetitive merger is OK'd, there is usually a token subsidiary sale to appease critics. Best, Don Bauder

Feb. 13, 2015

I sure don't understand the way anti-trust laws work in the U.S. They don't seem to work the way I would expect.

I think most of the major sports leagues (AFL merge with NFL, ABA merge with NBA) exploit their monopolies to encourage taxpayers to provide generous benefits. As I understand it the argument has been made that there are several major sports leagues so each one isn't really a monopoly on all sports entertainment - but that seems like a pretty absurd argument to me.

I also don't understand how Ticketmaster was able to win an antitrust suit from Pearl Jam after Ticketmaster had basically forced most venues to stay away from Pearl Jam which wanted to sell tickets independently of Ticketmaster.

Certainly there have been mergers galore in the utilities and telecommunications areas.

Feb. 14, 2015

ImJustABill: The antitrust laws in the United States are now very weak. I can remember the days, decades ago, when they were strong. Now, mergers that clearly crush competition in an industry generally get approved. Best, Don Bauder

Feb. 14, 2015

"When an anticompetitive merger is OK'd, there is usually a token subsidiary sale to appease critics. Best, Don Bauder"

So apparently Albertson's bought Vons and for some reason they are changing many Albertsons' in San Diego to something called Haggen. I think that is an example of what you mean.

Feb. 14, 2015

ImJustABill: No, what I mean is that a large company that buys a moderate-sized company in an industry, thus gaining a huge market share, often has to divest a division in the same industry. But the divestitures are usually insignificant. Best, Don Bauder

Feb. 14, 2015

So Qualcomm is big in their field, I understand that. But are they accused of being a monopoly? I've read several articles about the China problem but none have explained the actual charges against Qualcomm.

In any case, Samsung (the huge Korean consumer of such chips) seems to have decided not to use Qualcomm chips in their flagship devices. That should eliminate the monopoly possibility. So what remains to be investigated?

Feb. 13, 2015

swell: Samsung's decision may not eliminate the monopoly possibility. What we have thus far is a rumor as published by a Korean business publication. The rumor's source is unnamed. The rumor has a ring of credibility. We don't know the details, if the rumor is true. Best, Don Bauder

Feb. 14, 2015

QCOM doesn't have a monopoly on any type of chip. QCOM does have a monopoly on certain wireless technologies because it has critical patents for many (if not all) of the 3G and 4G cell phone standards (CDMA in particular). So any cell phone made using those standards will result in QCOM royalties - with or without QCOM chips.

I'm not really sure what exactly the dispute centers on - seems maybe China felt QCOM's licensing fees were unreasonable.

"The NDRC’s main allegation was that Qualcomm had a “monopoly” on modems for cell phones, particularly those using the CDMA standard, and had “abused its dominant position,” presumably by overcharging on licensing fees."

https://gigaom.com/2015/02/09/qualcomm-to-pay-975m-to-china-in-antitrust-settlement/

Feb. 16, 2015

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