Qualcomm receives Taiwan reprieve amid global antitrust battle

Bloomberg

Qualcomm Inc., the smartphone chipmaker fighting regulatory actions and lawsuits threatening its most profitable business, has reached a settlement with Taiwan’s antitrust regulators that reverses most of a $773 million fine.
As part of an agreement announced by the Fair Trade Commission, the company will invest $700 million over the next five years and boost research activities in Taiwan, home to a clutch of important suppliers to global names such as Apple Inc. In return, Qualcomm can stop paying fines and retains the right to charge manufacturers royalties on its technology. The commission said it will keep $89 million in fines that Qualcomm’s already paid but waive the rest.
Taiwan’s decision reverses one of a number of actions taken against Qualcomm in recent years that investors worry will destroy its patent-licensing business, a unit that generates the majority of the company’s profit. Qualcomm has argued that such moves are part of a global push by Apple to elicit government support for its legal fight with the chipmaker.
The iPhone maker is suing Qualcomm for antitrust
violations, alleging the San Diego-based company unfairly leverages its market position in modem chips, and has said regulatory actions worldwide show its claims are justified.
Qualcomm shares were down less than 1 percent in early trading in New York.
Qualcomm still faces multiple lawsuits brought by Apple, as well as actions and investigations in the European Union and the US. The flood of legal challenges has weighed on the company’s stock price and made it a target for a failed hostile takeover bid by rival Broadcom Inc.
“Both parties felt the FTC’s fines were controversial. And we feel, if we continue with the lawsuit, it will take too long should we take Taiwan’s industry progress into consideration,” FTC Commissioner Hong Tsai-Lung said. A lengthy legal process “will have a very negative impact on Taiwan’s development, so that is why our stand has changed following an internal collective decision.”