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Just as it settled a major investigation in China, Qualcomm may be facing even more regulatory problems.
South Korean competition regulators are starting to investigate Qualcomm’s business practices there, several news sources reported, citing unnamed sources. This information comes just days after the chipmaker on Monday agreed to pay a record $975 million fine in China for alleged monopolistic practices.
Qualcomm, based in San Diego, Calif., declined to comment.
The company — the maker of Snapdragon chips and the world’s biggest maker of mobile chips — has been facing more scrutiny from antitrust regulators, who are looking into whether the firm is unfairly using its dominant position in mobile. The company for years has been the leader in providing mobile processors or radio chips, or both, to most major smartphones, including Apple’s iPhone, Samsung’s Galaxy phones, and Sony and LG phones. Along with the potential South Korea investigation, Qualcomm already is facing reviews from the US Federal Trade Commission and European Union.
On Monday, Qualcomm agreed to pay Chinese regulators a huge fine and start offering some communications licenses for use in China at a discount to what it offers elsewhere. That change could help local handset makers — including Xiaomi, Huawei and ZTE — cut down on costs and compete more effectively against leading smartphone players Apple and Samsung.
Despite the massive fine, Qualcomm emerged from the China investigation relatively unscathed, with the company able to pay the penalty without much difficulty and not required to change much in how it operates in China. However, the additional investigations may add more uncertainty for the firm. Also, if Qualcomm is forced to make major changes to its business practices following these other investigations, that may create an opening for rivals such as MediaTek or Intel to steal business.
So far, though, Qualcomm’s stock has rebounded after a big drop last month, with the resolution in China helping drive up the stock.
