Antitrust complaints are task force's focus
signonsandiego.com
By Kathryn Balint
UNION-TRIBUNE STAFF WRITER
January 3, 2007
South Korea's antitrust agency has formed a task force to investigate complaints against San Diego-based Qualcomm, according to The New York Times.
The investigation into Qualcomm was prompted by complaints filed in June by Nextreaming and Thin Multimedia, two South Korean high-tech companies that accused the San Diego wireless technology giant of using its market dominance to demand excessive royalties.
Advertisement The complaints filed in South Korea are similar to others filed in Europe, Japan and the United States accusing Qualcomm of trying to stifle competition.
Qualcomm argues that its licensing agreements are lawful and actually foster competition. The company said it makes its technology available even to small companies that are trying to break into the wireless market and that otherwise might not have been able to succeed.
“We know nothing about it,” Qualcomm spokeswoman Bertha Agia said of yesterday's move by South Korea's antitrust watchdog agency, the Fair Trade Commission.
The $7.5 billion-a-year company developed wireless technology known as code-division multiple access, or CDMA. The company's patented technology is on its way to being used in virtually every cell phone in the world.
Qualcomm makes money by collecting royalty fees from cell phone makers that use its technology and by selling chips that power cell phones.
More than 130 companies worldwide – including the largest players in the telecommunications industry – have licensing agreements with Qualcomm.
The creation of a task force, which is modeled after the one investigating antitrust complaints against Microsoft, means that the case in question merits a full-blown investigation, said Na Yang-ju, a spokesman for the Fair Trade Commission.
But commission officials also acknowledged that the case against Qualcomm was more complicated than they had expected. A year ago, the commission ruled that Microsoft was guilty of breaching fair-trade rules, a decision the company is appealing.
“We have been investigating Qualcomm's case since last April, but we have found it to be a complicated case where facts are difficult to establish,” said Lee Seung-kyu, an investigator for the commission.
South Korea is home to several leading mobile phone makers as well as smaller companies that provide technology and components. More than 80 percent of the country's population of 48 million carry cell phones, all based on Qualcomm technology.
“Companies here have constantly complained about Qualcomm demanding too much royalty,” said Kevin Lee, an industry analyst at Woori Investment and Securities in Seoul. “The investigation can be seen as political pressure on Qualcomm to be more friendly toward South Korean companies which use its technology.”
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