In October last year the Taiwan Fair Trade Commission was set to fine American smartphone chipmaker Qualcomm over US$700 million for corporate monopoly violations. But on August 10 the government agency reversed that decision and indicated it would settle with Qualcomm, leading to cooperation agreements with the company and new conditions for its business in Taiwan.
Qualcomm said it would spend US$700 million to promote Taiwanese industry, for the benefit of business and consumers, over the next five years. Some of that funding will help industry launch 5G networks and expand into new markets. Qualcomm will build a new operations center and production facility in Taiwan, too.
Government incubator the Industrial Technology Reseach Institute and Qualcomm will work together on the 5G networks.
The commission fined Qualcomm last year and asked it to change intellectual property contracts with competitors in the industry. Its chief Taiwanese competitor is MediaTek. Qualcomm did not accept the verdict and sought to settle, in the process suspending the 5G project.
Qualcomm will not challenge the NT$3.7 billion (US$121 million) in fines it has already paid.
Early days of cooperation
Taiwan Minister of Science and Technology Cheng Liang-gee said last year it was unclear whether cooperation Qualcomm on 5G was completely beneficial.
Many of Taiwan’s 5G products and services had not hit the market when expected, but ties with Qualcomm should give Taiwanese manufacturers such as MediaTek the chance to keep up with new industry trends in 5G, Cheng said.
Because, Cheng said, “the company has reached the agreement in good faith, we are certain that cooperation between Qualcomm and Taiwanese partners will resume just as before.”
Also as part of the settlement, the San Diego, California-based firm known especially for its Snapdragon line of mobile phone processors agreed to certain patent licensing terms in Taiwan.
It’s barred from threatening to stop supplies of chips in violation of any contracts it has with Taiwanese buyers. Qualcomm’s Standard Essential Patents (SEP) licensing program may not discriminate against any signatory, regardless of its scale.
Qualcomm will provide contractual agreements upon request from Taiwanese chip suppliers.
Taiwan is one in a string of governments that have fined Qualcomm for its alleged monopolistic licensing scheme, with China fining the company in 2015 and South Korea doing the same in 2016. Tech heavyweights such as Apple and Foxconn have filed their own lawsuits against the company, accusing it of using the scheme to charge contractors twice for its chips.
Qualcomm has agreed to submit a report to the Taiwan government twice a year through 2023, and if it signs a contract with any Taiwanese chip supplier or mobile phone manufacturer, the company must report that to the Fair Trade Commission within 30 days.
If Qualcomm does not honor its commitments, the commission will use arbitration to settle disputes.