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Qualcomm fined $853 mn by S. Korea anti-trust watchdog

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Seoul (AFP)

South Korea's anti-trust watchdog slapped US computer chip giant Qualcomm with a record fine exceeding $850 million on Wednesday for abusing its dominant market position as a maker of baseband chipsets used in mobile phones.

The announcement came as Qualcomm faces ongoing anti-trust probes in the United States, the European Union and Taiwan.

The Fair Trade Commission (FTC) said Qualcomm and two of its affiliates had violated rules by refusing to offer licenses that are essential for manufacturing chipsets to rival manufacturers and had imposed unfair contracts on smartphone makers.

"The FTC orders Qualcomm to take corrective measures against its power abusing business and imposes 1.03 trillion won ($853 million) in fines," the watchdog said in a statement that followed a three-year-long investigation.

"The decision is aimed at putting right Qualcomm's unfair business model."

The penalty is the highest-ever fine imposed by the FTC, breaking an earlier record of 668.9 billion won levied on six gas suppliers in 2010, Yonhap news agency reported.

The San Diego-based chip maker said it would approach the Seoul High Court to appeal the decision.

"This is an unprecedented and insupportable decision relating to licensing practices that have been in existence in Korea and worldwide for decades," the company said in a statement posted on its official website.

Qualcomm said the FTC had failed to provide any evidence that the firm's practices had harmed competition, adding that the ruling would disrupt established licensing practices in the mobile technology industry including by South Korean companies like Samsung and LG.

According to the FTC, South Korea accounts for about 20 percent of Qualcomm's worldwide sales of chipsets and license royalties.

Last year, China levied a fine of $975 million on Qualcomm for a breach of the country's anti-monopoly law. The company did not dispute the decision.

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