Qualcomm, Taiwan reach settlement on $773M antitrust fine

The chipmaker is facing one less lawsuit now that it has agreed to invest in Taiwan in exchange for the dismissal of a large fine.

According to Bloomberg News, Qualcomm has reached a settlement agreement with Taiwanese antitrust regulators. Under terms of the deal, the regulators have agreed to reverse most of a $773 million fine against the chipmaker, in exchange for Qualcomm investing $700 million in Taiwan over the next five years.

The company also agreed to conduct more research in Taiwan, and can once again charge royalties on its technology in the country.

The fine was first assessed in October 2017, when Taiwan's FTC claimed that over a seven-year period, Qualcomm had "abused its advantage in mobile communication standards, refused to license necessary patents."

Qualcomm will not get back the $89 million already paid in fines, but will no longer be on the hook for the rest.

The company is currently in the midst of multiple patent and royalty lawsuits, including more than a dozen between Qualcomm and Apple that are being fought in the U.S., the European Union and other parts of the world. Qualcomm believes Apple is putting pressure on governments to act against Qualcomm.

In July, Qualcomm indicated that Apple will use modems from Intel, rather than Qualcomm, beginning with a future generation of iPhones. The move is unconfirmed, but could deal a significant revenue blow to Qualcomm.

In March, the U.S. government blocked a hostile takeover bid of Qualcomm by rival Broadcom.

17 Comments

ericthehalfbee 4489 comments · 13 Years

About 6 years ago

I’m losing track. What is that now, 5 fines/settlements? All in the 3/4 to 1 billion range?

gatorguy 24608 comments · 13 Years

Wow. I think Qualcomm got a pretty good deal. Frankly quite shocked if the case was so open-and-shut that Taiwan would roll it back, forget about a fine, and agree to the same general licensing model they had issues with before with the stipulation it invests in Taiwanese plant.

ericthehalfbee said:

I’m losing track. What is that now, 5 fines/settlements? All in the 3/4 to 1 billion range?

China fined 'em around $900M (US), but then allowed them to go back to their general licensing practices, tho instead of charging royalties on 100% of a device's selling price they'll charge Chinese OEM's at 65% of it. China ends up validating and approving royalties based on selling price of the total device which seems an odd outcome.

Taiwan collected $90M (US) and is dropping the charges (does that mean they are considered innocent now, technically never found guilty?) as explained in the AI article. This one also ends up largely validating Qualcomm's licensing model too so yet another odd outcome.

The Korean antitrust case against them is apparently under review with questions about Samsung influencing the outcome as part of a corruption scandal involving Korean government officials so hard to say how that one plays out. Big surprise huh?

The EU Commission also wants $1.2B US and considering it's the EU I suspect an appeal will be for naught. (Does anyone win EU Commission appeals?). That one was a bit different tho as the EU's complaint involved Qualcomm paying rebates to Apple to lock them in as a customer and thus "stifle competition". the general licensing model is allowed to continue. Yet more oddity.

I'm not aware of any other current antitrust rulings and fines but there might be. There's still investigations under way in various venues according to media articles so no doubt more to come.

gatorguy said:

ericthehalfbee said:

I’m losing track. What is that now, 5 fines/settlements? All in the 3/4 to 1 billion range?

China fined 'em around $900M (US), but then allowed them to go back to their general licensing practices, tho instead of charging royalties on 100% of a device's selling price they'll charge Chinese OEM's at 65% of it. China ends up validating and approving royalties based on selling price of the total device which seems an odd outcome.

Taiwan collected $90M (US) and is dropping the charges (does that mean they are considered innocent now, technically never found guilty?) as explained in the AI article. This one also ends up largely validating Qualcomm's licensing model too so yet another odd outcome.

The Korean antitrust case against them is apparently under review with questions about Samsung influencing the outcome as part of a corruption scandal involving Korean government officials so hard to say how that one plays out. Big surprise huh?

The EU Commission also wants $1.2B US and considering it's the EU I suspect an appeal will be for naught. (Does anyone win EU Commission appeals?). That one was a bit different tho as the EU's complaint involved Qualcomm paying rebates to Apple to lock them in as a customer and thus "stifle competition". the general licensing model is allowed to continue. Yet more oddity.

I'm not aware of any other current antitrust rulings and fines but there might be. There's still investigations under way in various venues according to media articles so no doubt more to come.

Blackberry got $815 million through arbitration over patent license royalties (the exact details are unknown, but it sure sounds similar to other cases). This case is final and can't be appealed.

ericthehalfbee said:

gatorguy said:

ericthehalfbee said:

I’m losing track. What is that now, 5 fines/settlements? All in the 3/4 to 1 billion range?

China fined 'em around $900M (US), but then allowed them to go back to their general licensing practices, tho instead of charging royalties on 100% of a device's selling price they'll charge Chinese OEM's at 65% of it. China ends up validating and approving royalties based on selling price of the total device which seems an odd outcome.

Taiwan collected $90M (US) and is dropping the charges (does that mean they are considered innocent now, technically never found guilty?) as explained in the AI article. This one also ends up largely validating Qualcomm's licensing model too so yet another odd outcome.

The Korean antitrust case against them is apparently under review with questions about Samsung influencing the outcome as part of a corruption scandal involving Korean government officials so hard to say how that one plays out. Big surprise huh?

The EU Commission also wants $1.2B US and considering it's the EU I suspect an appeal will be for naught. (Does anyone win EU Commission appeals?). That one was a bit different tho as the EU's complaint involved Qualcomm paying rebates to Apple to lock them in as a customer and thus "stifle competition". the general licensing model is allowed to continue. Yet more oddity.

I'm not aware of any other current antitrust rulings and fines but there might be. There's still investigations under way in various venues according to media articles so no doubt more to come.

Blackberry got $815 million through arbitration over patent license royalties (the exact details are unknown, but it sure sounds similar to other cases). This case is final and can't be appealed.

Yup, forgot about that one. Thanks, but as I understand it that settlement had to do with money owned to Blackberry as part of a shared licensing contract (BB was to get certain monies from Qualcomm-collected royalties but the amount was in dispute) rather than the Qualcomm licensing model itself so not really anything to do with antitrust or competition claims.