Taiwan’s Fair Trade Commission fines Qualcomm $774 million

Taiwan's Fair Trade Commission announced yesterday that it suspects Qualcomm to be guilty of unfair business practices. The commission says that the California-based chipmaker forced licensees of its modems and platforms to agree to expensive licensing deals and reject competitors' offers. The decision comes along with a hefty fine to the tune of $23.4 billion New Taiwan dollars, or around $774 million USD.

Qualcomm naturally denies the allegations and intends to contest the decision. The company announced that it "intends to seek to stay any required behaviorial measures" and that it will appeal the decision in the Taiwanese courts. Qualcomm says that the fine "bears no rational relationship to the amount of Qualcomm's revenues or activites in Taiwan," and that it'll "appeal the amount of the fine and the method used to calculate it."

Whether there is any truth to the allegations isn't for us to say. However, as The Register points out, Qualcomm has previously faced castigation for anti-competitive actions in South Korea as well as its home court here in the US. Couple that with the chipmaker's brewing trouble with Apple, and it looks like the company will be tangled up in red tape for some time.

Comments closed
    • ronch
    • 2 years ago

    I’m not saying Qually is innocent or anything, but let’s also not forget that a certain other big SoC provider is a Taiwanese company. Let’s not kid ourselves: in a big money game such as SoCs for devices that practically everyone buys, things can and *does* get … dirty.

      • NTMBK
      • 2 years ago

      Qualcomm sends massive amounts of money to TSMC, a Taiwanese company, and the major beneficiary of this is likely to be Intel’s modem business… an American company.

        • ronch
        • 2 years ago

        What I’m hinting at is how Mediatek may have heard whisperings of Qualcomm’s shady practices in Taiwan and elsewhere (after all, they both talk to the same device makers all over the world) and may have tipped Taiwan’s FTC. Being a Taiwanese company they probably could more easily persuade their Taiwanese comrades to take action against Qualcomm. This is kinda like how AMD makes noise about Intel’s anti-competitive practices.

          • willmore
          • 2 years ago

          Mediatek is in no position to be casting pattent shade on anyone. They have plenty of issues of their own to deal with. If they started something like this, it would end badly for them.

            • ronch
            • 2 years ago

            I never said Mediatek is fighting Qualcomm directly. I’m saying they might have tipped the FTC about such dealings.

    • duke_sandman
    • 2 years ago

    Maybe it’s the capitalist in me, but I don’t see what’s wrong with saying, “If you buy my product, you can’t buy my competitors.” I wonder how this affects their deal to buy NXPI?

      • jihadjoe
      • 2 years ago

      I believe that was the whole issue of AMD vs Intel back in the day

      • GrimDanfango
      • 2 years ago

      Isn’t that the very definition of abusing a monopoly?

      If the biggest player in a particular market is entirely within their legal rights to mercilessly bully every other competitor out of business entirely, it will both cause a massive amount of suffering for employees of those competitors, completely stifle all innovation, and leave the entire customer base captive to whatever overinflated prices they think they can squeeze out of people.

      Sure, nothing wrong with that at all.

        • BobbinThreadbare
        • 2 years ago

        Another way of putting it: it’s not a problem if you don’t have monopoly power over the market. It is if you do

      • usernam3
      • 2 years ago

      This kind of arrangement would likely be fine if neither side had near monopolistic position. Once you have the market player as strong as Qualcomm, it’s no longer just a deal between the two sides (while the end customer still had a choice of competitively priced products). Every contract affect the rest of the market and further solidifies the positions of the major producer. Very much like our “free” market of broadband/cable services that I’m sure you’re happy to be stuck with.

        • duke_sandman
        • 2 years ago

        Interesting; I wasn’t trying to be a jerk. I didn’t know QCOM was viewed as having a monopoly by some people. I never thought of them that way.

          • Klimax
          • 2 years ago

          Monopoly is not required. Dominant position is usually enough. (Like having 30of market with everybody else having 5-10% each…)

            • BobbinThreadbare
            • 2 years ago

            There were cases in USA where companies with as little as 18% of the market were considered too dominant (this was in the 70s, I wouldn’t expect any modern court to agree with those rulings).

      • blastdoor
      • 2 years ago

      That’s the kind of Scrooge McDuck capitalism that makes Marxism almost seem like a good idea. I definitely appreciate the honesty, though.

      • AMDisDEC
      • 2 years ago

      No, rather than blaming capitalism, blame stupidity.
      If American capitalists are so smart, than why do they owe $5 trillion (and growing) dollars to a communist country, China?
      The massive figure is proof positive that communist China easily out-smart and out-capitalisms the capitalists.

      This massive fine is also something you are not likely to ever see in America. If it were America, the fine would have been in the tens of millions versus the hundreds of millions even though it should have been in the billions.

      Stupid White Men: …And Other Sorry Excuses for the State of the Nation!
      Michael Moore

        • blastdoor
        • 2 years ago

        [quote<]If American capitalists are so smart, than why do they owe $5 trillion (and growing) dollars to a communist country, China?[/quote<] A lot could be said about that, but I'll just say this.... If I owe the bank $1,000, that's my problem. If I owe the bank $1 trillion, that's the bank's problem -- especially if I used the money to build a heavily armed fortress. Tell me again who is so smart? 😉

          • AMDisDEC
          • 2 years ago

          Only an idiot doesn’t realize the US dollar represents debt, not value. In the case of the US’s debt to China, the US must make annual interest payments to China, on time and every time, with those interest rates growing quarterly. China is using these payments to expand and improve their infrastructures, not like the US where the payments would be diverted to Wall street and the wealthy.
          George Bush Jr., who stole billions from US taxpayers and Donald Trump who has (so far) stolen hundreds of millions from US taxpayers are both quintessential representatives of the typical white male American capitalists and their severe lack of business savvy. They look/think like the rest, which is exactly how in spite of them being the most incompetent people in the country, they got elected.

          Korea made the same mistake as Japan in emulating all the wrong aspects of US capitalism, which led to Japan’s devastating economic depression. They will recover, but America won’t because they love monopolies and electing wannabe Russian oligarchs like Bush and Trump who strongly feel they are entitled to mooch off of the government’s tax dollars.

            • blastdoor
            • 2 years ago

            I actually agree with a large chunk of what you’re saying, but the debt part is off target. If only idiots hold dollar denominated assets, then the Chinese must be the biggest idiots of all.

            I almost completely agree with your assessments of Trump and Bush.

            I think the problems with US capitalism can be summed up by two, related items:

            1. fossil fuels industry
            2. low inheritance tax

            Combine those two things and what do you get? Our public policy is dominated by the trust-fund empowered descendants of some hicks who got lucky in where they dug a hole in the ground.

            Everywhere in the world where wealth associated with natural resources is concentrated in the hands of a small number of people (Saudi Arabia, Russia, the US) you’ll find stupid oligarchs abusing power they didn’t earn, don’t deserve, and can’t understand.

            • AMDisDEC
            • 2 years ago

            Perhaps you don’t remember when Bush devastated the US economy and the dollar sank to record lows, how a week after Obama took office he made a quick trip to China.
            China was concerned about their trillion in US debt and was planning to release a new silver based Chinese international currency. Obama somehow succeeded in having China postpone introducing the currency, bu China could release it any time in the future, and just think what will happen to the US dollar based on nothing, and the world economy.
            The problem for the US is, China understands fiat currency much better than the US or Europe does.

      • K-L-Waster
      • 2 years ago

      Imagine if Walmart worked that way. “You can only buy my merchandise if you agree to never shop anywhere else for (x amount of time).”

      • Laykun
      • 2 years ago

      One of the staples of Capitalism is a competitive market. This behaviour is anti-competitive and thus anti-capitalist.

    • shank15217
    • 2 years ago

    Gee, why can’t these companies just fire their legal teams spend that money innovating?

      • dpaus
      • 2 years ago

      Sorry, but it sounds like you’ve never even heard of patent trolls, let alone dealt with one.

        • shank15217
        • 2 years ago

        Hold on, who’s the patent troll here?

      • ronch
      • 2 years ago

      In a perfect world where everyone is nice, yeah maybe that’s possible.

        • shank15217
        • 2 years ago

        Yea that was my hope as well, this is an arms race of sorts where basically everybody loses and actual progress is stifled.

      • K-L-Waster
      • 2 years ago

      Not sure what “innovation” has to do with exclusive source contracts….

      • GatoRat
      • 2 years ago

      What good would innovation do if your competitor is engaging in illegal means to prevent you from selling whatever you produce?

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