(The Investor)

Qualcomm has waged a legal war against South Korea’s Fair Trade Commission, filing a lawsuit in Seoul late Tuesday, unyielding to the antitrust agency’s order of a massive fine and corrective measure.

The legal fight between the US mobile chipmaker and Korean government body is expected to be unprecedentedly fierce, as both sides have vowed to win by mobilizing all possible measures, legal sources say.

“The battle could be longer than usual, considering it is a matter of pride for both sides,” said an antitrust lawyer at a local law firm.

Qualcomm filed the suit with the Seoul Central District Court, asserting the FTC punishment, including the largest-ever fine on a foreign business operating in the local market and a corrective measure, imposed last year, are unacceptable and unfair.

Last December, the US mobile chipmaker was slapped with a record 1.03 trillion won ($902 million) fine for abusing its dominant market position in the Korean market by refusing to offer licenses to chipset manufacturers and demanding high fees for its patents used by local smartphone makers.

The FTC decision was made amid similar investigations ongoing in Japan, Taiwan and the US into Qualcomm. The Chinese government in February 2015 imposed a fine of 6.08 billion yuan ($883 million) on Qualcomm on antitrust charges.

Qualcomm is a dominant player in the global communications chip market, with the highest number of standard essential patents for the 2G, 3G and 4G networks. The company accounted for 83.1 percent of the 2G chip sector and 69.4 percent of the LTE chip market as of 2015.

If the Seoul court rejects the suit, the American company should not only pay the huge fine, but may also have to ditch its license-based sales operations that it has maintained for the last 20 years.

“It seems like the Korean ruling would affect similar conflicts in other countries,” the lawyer said. “Qualcomm would be desperate to win the case to avoid similar antitrust punishments by other countries, while the Korean FTC that is involved in the ongoing corruption scandal should prove its decision-making process was correct and fair.”

Qualcomm’s General Counsel Don Rosenberg took issue with the FTC’s decision recently, saying that Kim Hak-kyun, the former FTC vice chairman who signed off on the massive fine against Qualcomm in December, is being investigated by prosecutors on his ties with Samsung Electronics, a major customer of the US company.

The FTC, on the other hand, is also bracing for an intense dispute by launching a task force consisting of outside legal experts for the first time.

“The recent scandal is irrelevant to mention, since it is a separate matter,” said an FTC official. “The fine on Qualcomm is purely the result of the company’s violation of Korea’s antitrust law.”

By Song Su-hyun (song@heraldcorp.com)