Qualcomm, Taiwan reach settlement on $773M antitrust fine

Posted:
in General Discussion edited August 13
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.

Qualcomm headquarters


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.

Comments

  • Reply 1 of 17
    I’m losing track. What is that now, 5 fines/settlements? All in the 3/4 to 1 billion range?
    bshank
  • Reply 2 of 17
    gatorguygatorguy Posts: 18,907member
    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. 
    edited August 10 muthuk_vanalingam
  • Reply 3 of 17
    gatorguygatorguy Posts: 18,907member
    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.
    edited August 10 muthuk_vanalingamjony0
  • Reply 4 of 17
    gatorguy 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.
    muthuk_vanalingam
  • Reply 5 of 17
    gatorguygatorguy Posts: 18,907member
    gatorguy 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.
    edited August 10 muthuk_vanalingam
  • Reply 6 of 17
    gatorguy said:
    gatorguy 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 connected to antitrust or competition claims.

    That's speculation as the actual terms are sealed. What we do know is A) it involves Qualcomm (yet again) and B) it's related to patent licensing (yet again). Yet another case of Qualcomm being in the wrong over a patent related issue, and having to pay for it. It speaks to the actions of Qualcomm overall as a company in regards to how it deals with licensees.
  • Reply 7 of 17
    gatorguygatorguy Posts: 18,907member
    gatorguy said:
    gatorguy 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 connected to antitrust or competition claims.

    That's speculation as the actual terms are sealed. What we do know is A) it involves Qualcomm (yet again) and B) it's related to patent licensing (yet again). Yet another case of Qualcomm being in the wrong over a patent related issue, and having to pay for it. It speaks to the actions of Qualcomm overall as a company in regards to how it deals with licensees.
    Speculation? Hardly. No idea where you plucked that from as it's clearly false. It was an arbitration case, and which Qualcomm themselves announced the details of. 
    https://www.qualcomm.com/news/releases/2017/04/12/arbitration-panel-awards-refund-blackberry
    http://www.ipwatchdog.com/2017/06/02/blackberry-settles-arbitration-qualcomm-940-million-contract-dispute-patent-royalties/id=83882/

    But yes I agree with you that it involves Qualcomm and royalties, so yeah count it if you want. 
    edited August 10
  • Reply 8 of 17
    Is it’s business as usual as usual at Qualcomm?  No changes in behavior required? No paying back those harmed?

    So, if I murdered someone it would be all forgiven if I promised to invest?

    Governments have interesting business models...
    edited August 10 claire1
  • Reply 9 of 17
    gatorguygatorguy Posts: 18,907member
    Is it’s business as usual as usual at Qualcomm?  No changes in behavior required? No paying back those harmed?

    So, if I murdered someone it would be all forgiven if I promised to invest?

    Governments have interesting models...
    Yes they have to make changes, Qualcomm has to be "fair" from now on with Taiwan companies. Yeah I know, pretty darn vague. 
  • Reply 10 of 17
    gatorguy said:
    gatorguy said:
    gatorguy 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 connected to antitrust or competition claims.

    That's speculation as the actual terms are sealed. What we do know is A) it involves Qualcomm (yet again) and B) it's related to patent licensing (yet again). Yet another case of Qualcomm being in the wrong over a patent related issue, and having to pay for it. It speaks to the actions of Qualcomm overall as a company in regards to how it deals with licensees.
    Speculation? Hardly. No idea where you plucked that from as it's clearly false. It was an arbitration case, and which Qualcomm themselves announced the details of. 
    https://www.qualcomm.com/news/releases/2017/04/12/arbitration-panel-awards-refund-blackberry
    http://www.ipwatchdog.com/2017/06/02/blackberry-settles-arbitration-qualcomm-940-million-contract-dispute-patent-royalties/id=83882/

    But yes I agree with you that it involves Qualcomm and royalties, so yeah count it if you want. 

    Those links hardly explain anything. They are both repeating the same point, which is a single sentence from Qualcomm about the deal. We don't know a damn thing about how Blackberry and Qualcomm's licensing deal was structured or what the original terms are. Therefore nobody can make the claim that it was related to antitrust issues or not.

    My point still stands. Qualcomm has lost numerous cases in multiple jurisdictions around the world (and still has several to go). If they were found guilty in a single case, one could argue it was an outlier or related to the laws of a specific region. To lose (and be investigated) so many times in such a short span of time over patent licensing issues is a pretty clear indicator who's in the wrong here. And it's obvious that entity is Qualcomm.
    StrangeDays
  • Reply 11 of 17
    gatorguygatorguy Posts: 18,907member
    gatorguy said:
    gatorguy said:
    gatorguy 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 connected to antitrust or competition claims.

    That's speculation as the actual terms are sealed. What we do know is A) it involves Qualcomm (yet again) and B) it's related to patent licensing (yet again). Yet another case of Qualcomm being in the wrong over a patent related issue, and having to pay for it. It speaks to the actions of Qualcomm overall as a company in regards to how it deals with licensees.
    Speculation? Hardly. No idea where you plucked that from as it's clearly false. It was an arbitration case, and which Qualcomm themselves announced the details of. 
    https://www.qualcomm.com/news/releases/2017/04/12/arbitration-panel-awards-refund-blackberry
    http://www.ipwatchdog.com/2017/06/02/blackberry-settles-arbitration-qualcomm-940-million-contract-dispute-patent-royalties/id=83882/

    But yes I agree with you that it involves Qualcomm and royalties, so yeah count it if you want. 

    Those links hardly explain anything. They are both repeating the same point, which is a single sentence from Qualcomm about the deal. We don't know a damn thing about how Blackberry and Qualcomm's licensing deal was structured or what the original terms are. Therefore nobody can make the claim that it was related to antitrust issues or not.

    My point still stands. Qualcomm has lost numerous cases in multiple jurisdictions around the world (and still has several to go). If they were found guilty in a single case, one could argue it was an outlier or related to the laws of a specific region. To lose (and be investigated) so many times in such a short span of time over patent licensing issues is a pretty clear indicator who's in the wrong here. And it's obvious that entity is Qualcomm.
    I never disagreed that you "had a point" so not sure what you're arguing about. I had several points to add to your rather vague one. I offered you detail expanding on your question about the number of antitrust suits and settlements (you said you lost track) which would have been presumed to be helpful, and in fact is tho apparently not to you? Not everything I post needs to be found disagreeable by Eric.

    That I specifically pointed out that these settlements with Qualcomm allowing their licensing models to continue was something I considered odd should have been an obvious clue that I agree with you about "who's in the wrong here".
    edited August 10
  • Reply 12 of 17
    avon b7avon b7 Posts: 2,466member
    The fine should have stood if their activity was deemed abusive or unlawful. Part of the objective is to dissuade others from going down the same road.

    I remember when Microsoft actually asked if it could pay its anti-trust fine by providing schools with PCs for 'free'. I was flabbergasted that they had the cheek to try that.

    QC seems to have got off very lightly.
    seanismorris
  • Reply 13 of 17
    Rayz2016Rayz2016 Posts: 3,934member
    avon b7 said:
    The fine should have stood if their activity was deemed abusive or unlawful. Part of the objective is to dissuade others from going down the same road.

    I remember when Microsoft actually asked if it could pay its anti-trust fine by providing schools with PCs for 'free'. I was flabbergasted that they had the cheek to try that.

    QC seems to have got off very lightly.
    Lightly?

    Theyve already paid 89million, which means they only owed 684million when they agreed to pay 700million to settle the case. 

    So in effect, they agreed to pay an extra 16million to wrap this up quickly. 

    When the EU realises that Qualcomm will pay extra to avoid the protracted stalling of its licensing business then I suspect the fines to increase, followed by a settlement greater than the fine. 

    edited August 10
  • Reply 14 of 17
    nunzynunzy Posts: 530member
    Apple should destroy Qualcomm.
  • Reply 15 of 17
    gatorguygatorguy Posts: 18,907member
    Rayz2016 said:
    avon b7 said:
    The fine should have stood if their activity was deemed abusive or unlawful. Part of the objective is to dissuade others from going down the same road.

    I remember when Microsoft actually asked if it could pay its anti-trust fine by providing schools with PCs for 'free'. I was flabbergasted that they had the cheek to try that.

    QC seems to have got off very lightly.
    Lightly?

    Theyve already paid 89million, which means they only owed 684million when they agreed to pay 700million to settle the case. 

    So in effect, they agreed to pay an extra 16million to wrap this up quickly. 

    When the EU realises that Qualcomm will pay extra to avoid the protracted stalling of its licensing business then I suspect the fines to increase, followed by a settlement greater than the fine. 

    An investment in plant and business operations on which they would be presumed to profit would hardly be equivalent to a fine. They really did get off lightly IMO, and I'm kinda surprised you think they didn't. 
    edited August 10 seanismorris
  • Reply 16 of 17
    Rayz2016 said:
    avon b7 said:
    The fine should have stood if their activity was deemed abusive or unlawful. Part of the objective is to dissuade others from going down the same road.

    I remember when Microsoft actually asked if it could pay its anti-trust fine by providing schools with PCs for 'free'. I was flabbergasted that they had the cheek to try that.

    QC seems to have got off very lightly.
    Lightly?

    Theyve already paid 89million, which means they only owed 684million when they agreed to pay 700million to settle the case. 

    So in effect, they agreed to pay an extra 16million to wrap this up quickly. 

    When the EU realises that Qualcomm will pay extra to avoid the protracted stalling of its licensing business then I suspect the fines to increase, followed by a settlement greater than the fine. 

    Qualcomm got the equivalent of a toddler getting a time out.  1. Pay a $90 million fine instead of fine for 8 times that amount.  2.  They get to make a capital investment in Taiwan over the next 5 years - that's not the same thing as paying a fine; not by any definition that makes sense.  An investment they were likely to make somewhere anyway.  Build in Taiwan or the Phillipines or doesn't really matter.  They were probably going to invest that $700 million (and more) over the next 5 years.  3.  They get to profit from the investment.  Bulid a $1B factory in Taiwan and profit from it - but we'll call it a fine.  4. They get to keep charging royalties.
    Now that I think about it, that's the equivalent of sending a teenager to his room where his XBox, laptop, iPad, phone, and TV are all waiting for him.

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