Qualcomm Accused of Unfair Trade in Korea

A South Korean trade commission has taken what could be a first step toward regulating wireless chip vendor Qualcomm's business practices in the country.

Qualcomm said Tuesday that the Korea Fair Trade Commission (KFTC) had issued a Case Examiner's Report outlining allegations about the way the company prices and integrates multimedia technology into its chipsets, which are used in mobile phones. The confidential report was given to Qualcomm late last month, but it took the company several weeks to translate the document and determine the appropriate action, said Qualcomm spokeswoman Christine Trimble.

The Korea Fair Trade Commission regulates anticompetitive behavior in South Korea. It could not be reached for comment Tuesday.

Qualcomm said it believes that none of its business practices violate South Korean law.

Three years ago, KFTC officials visited offices at Qualcomm and three of its customers to look into the company's business practices. Qualcomm has also come under the watch of regulators in Japan and the European Union, where competitors have accused the chip maker of reneging on agreements it made while developing the WCDMA (Wideband Code Division Multiple Access) standard.

In a November 2008 SEC filing, Qualcomm said that Texas Instruments and Broadcom, along with two South Korean competitors -- Nextreaming and Thin Multimedia -- had filed complaints with the KFTC "alleging that the Company's business practices are, in some way, a violation of South Korean anti-trust regulations."

Qualcomm has provided the Commission with information on "rebates on chipset sales, chipset design integration and royalties on devices containing a Qualcomm chipset," the filings state.

Now that there is an official report, Qualcomm has several months to respond to its allegations.