FTC to Observe Qualcomm Over 5G Practices

Joh Sung-wook, Fair Trade Commission (FTC) Chairwoman, addressing the press during a conference held in Sejong, Thursday. / Photo courtesy of FTC

The Fair-Trade Commission‘s Chief said on Thursday that the commission would carefully observe Qualcomm and other major chipmakers for possible unfair practices in the fifth-generation (5G) technology market.

Joh Sung-wook, FTC‘s chairwoman, stated in during a press conference held at FTC headquarters, “The FTC will set up a semiconductor team in the first quarter of next year, and closely monitor chipmakers over their potential impeding of rival entrants in terms of 5G chips.”

The statement came after her pledge to closely monitor local and global technology giants over practices that may undermine fair market competition.

The FTC set up a new taskforce last month, focusing on the info-tech industry. The commission created three teams in-charge of mobile and online platforms and intellectual property in partnership with the semiconductor team.

Industry officials widely interpreted the remark as aimed at semiconductor giants Qualcomm and Broadcom.

Chief of the FTC’s anti-monopoly bureau, Song Sang-min, said during the conference, “Based on experience, anti-competitive behavior usually occurs during the network standard’s transition from 2G to 3G, 3G to 4G.” The chief added, “Mobile devices require various chipsets, and we will monitor companies making those chipsets.”

The FTC, in 2016, slapped Qualcomm, which owns about 25,000 patents in mobile communications, with a fine of 1.03 trillion won ($887.4 million). The penalty came after the spread of 4G. The FTC also said Qualcomm hampered its competition using its intellectual property strategy. The antitrust committee deemed such practices as unfair, unreasonable, and discriminatory.

Qualcomm refused to accept the decision and filed a complaint against the FTC; however, the Seoul High Court supported the antitrust agency on December 4.

Industry officials said Broadcom could be on FTC’s watchlist along with Qualcomm.

The European Union (EU) recently instructed Broadcom not to establish exclusivity clauses to its six client firms.

Joh Sung-wook stated that the info-tech taskforce, along with the closer monitoring on chipmakers, will handle Google and Naver’s monopoly cases next year.

The FTC will impose a fine on Naver after alerting the portal operator in November warned of abusing its market dominance. The commission also suspects Google of the same charges.

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