South Korea fines Qualcomm $850 million for its patent licensing practices
American chipmaker Qualcomm is in hassle in South Korea. The nation’s antitrust regulator has fined the corporate roughly $850 million (1.03 trillion gained) for its patent royalty actions in South Korea.
Lots of you might be aware of Qualcomm for its chips. The subsequent time you learn the tech specs of your favourite smartphone, chances are high that you simply’ll discover a Qualcomm chip. The corporate manufactures LTE modems, ARM-based techniques on a chip for varied Android telephones and extra.
However there’s one other profitable aspect of the enterprise. Qualcomm makes a good portion of its income from licensing offers due to a wholesome portfolio of patents associated to wi-fi applied sciences. Whereas income from chips is rising sooner than licensing income, it nonetheless represents 32.eight p.c of the corporate’s whole income in accordance with the corporate’s newest earnings report.
However a three-year investigation in South Korea led to at this time’s fantastic. In line with the regulator, Qualcomm ought to have shared extra patents with different chip makers. Rivals embody Samsung, Intel and MediaTek.
Along with this challenge, the corporate additionally compelled cellphone makers to license too many patents. As Qualcomm is a key provider for a lot of cellphone makers, the corporate advised them that they would want to buy a bunch of licenses, even some they don’t want. It’s laborious to say no when Qualcomm gives the mind of your system.
And but, the corporate might be not prepared to show its again to its profitable patent licensing enterprise. Whereas the ruling comes from South Korea, different international locations might have a look at Qualcomm’s enterprise practices extra carefully.
Qualcomm will attraction the ruling however will possible should pay the fantastic earlier than the attraction anyway. If the fantastic is adjusted or canceled later down the street, the South Korean administration will reimburse Qualcomm. So the fantastic ought to have a direct affect on Qualcomm’s quarterly earnings.
Featured Picture: Justin Sullivan/Getty Photos