Broadcom, TI File South Korean Antitrust Compliant Against Qualcomm

Staff Reporter -- Electronic News, 7/3/2006

U.S. semiconductor manufacturers Broadcom Corp. and Texas Instruments (TI) Inc. have filed a complaint in Seoul, South Korea against Qualcomm Inc. alleging that the San Diego, Calif.-based CDMA technology provider abused its dominant market status in the country, according to news reports.

“The two U.S. companies filed a complaint against Qualcomm on June 23 with the Fair Trade Commission, arguing Qualcomm used its exclusive rights to the code division multiple access, or CDMA, technology to wield unbeatable power in Korea,” Na Yang-ju, a spokesman for the Fair Trade Commission said in a Dow Jones Newswires report.

Qualcomm developed CDMA, which is a rival standard to the dominant cellular standard GSM, and controls most of the key patents, and every handset in South Korea has a CDMA chip and handset manufacturers have to pay royalty fees to Qualcomm, the reports reminded.

Earlier this year, two Korean producers of handset software, Nextreaming Corp. and THINmultimedia Inc. lodged a similar complaint with the FTC against Qualcomm.

And last October, Broadcom, and TI, along with Nokia, Ericsson, NEC and Panasonic complained to Brussels over Qualcomm’s company's competitive practices, accusing the company of stifling competition in the mobile phone chip market.

The companies alleged Qualcomm had offered preferential terms on royalties of technology patents to manufacturers who also bought their chipsets, the hardware inside a mobile phone.

Regarding this most recent filing, “With the complaints, we began investigating the case early this year and it will take some time before any tangible results come up in the probe,” Na said in the reports.

In this case, TI and Broadcom claim that Qualcomm was leading the 3G W-CDMA chipset market in Korea by discriminating in its application of royalties and that it dominated the local CDMA modem chip market through a similar royalty policy, the reports said.

If it is found guilty of violating competition rules, Qualcomm would be forced to change its business practices or pay fines, and is just one of a string of U.S.-based technology companies being investigated by Korea's anti-competition regulators, the reports added.

South Korea is home to leading mobile phone makers including the world's third-biggest, Samsung Electronics Co. Ltd., and fourth-ranked LG Electronics Inc.

Qualcomm did not reply to a request for comment.