Qualcomm (NASDAQ:QCOM) is hoping to force some major tech companies including Apple (NASDAQ: AAPL) and Samsung to surrender documents that were supplied to South Korean antitrust regulators investing the San Diego-based chip maker.
Qualcomm filed applications in U.S. federal court for subpoenas that would allow Qualcomm to seek documents or other evidence from seven major customers and competitors. In addition to Apple and Samsung, Qualcomm also hopes to compel Intel, Texas Instruments, Broadcom, Via Technologies and the U.S arm of MediaTek to hand over documents.
The chip vendor said in its applications that such evidence could help it prepare for antitrust hearings in South Korea that are likely to begin in the next several months. Qualcomm is accused of violating Korean law through its licensing practices and may be forced to change certain business practices and face fines.
While it is the world's No. 1 chip vendor, the majority of Qualcomm's profits stem from licensing its technology to hardware companies.
Qualcomm publicly acknowledged the investigation two months ago, saying it had received the Korea Fair Trade Commission's (KFTC) staff-generated Case Examiner's Report, which initiates a process whereby the company can respond and defend itself. Among other things, regulators said Qualcomm doesn't properly negotiate aspects of its licenses, and that some of its policies for licensing patents violate South Korean competition law.
Indeed, regulators around the world have taken aim at Qualcomm in recent years, largely due to its practice of charging manufacturers royalties based on a percentage of the wholesale prices of their devices rather than licensing its technology to vendors who sell components that cost less than entire devices.
Qualcomm is currently undergoing two formal antitrust investigations by the European Commission. And in February 2015 it agreed to pay a $975 million fine and change its licensing practices to settle a Chinese antitrust investigation.
Qualcomm recently said it will remain intact as a single unit rather than splitting its chipset and licensing businesses. The company had said in July 2015 that it would consider splitting in two in an effort to placate investors unhappy with its financial performance.
- see this Wall Street Journal report
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