Huge Evaporation in a Day
According to Bloomberg, the stock price of Qualcomm fell 2.23% to close at US$65.75 per share on December 28 and its market cap decreased by US$2.215 billion to US$97.105 billion.
This has to do with the corrective order and 1.03 trillion won penalty the Fair Trade Commission of South Korea imposed on Qualcomm on the previous day for its abuse of market dominance with regard to chipset patents. The commission has never imposed such a large penalty. The previous high was 668.9 billion won, imposed in April 2010 on six LPG suppliers engaged in price fixing.
According to the commission, Qualcomm, which has standard-essential patents for the manufacturing of mobile phones, has strengthened its market dominance since November 2009 by refusing to share them with chipset manufacturers such as Samsung and Intel or hindering the use of the patents by the manufacturers. In addition, Qualcomm has signed patent contracts in favor of itself with mobile phone manufacturers by threatening to stop chipset supply by taking advantage of its dominance in the market.
Last year, Qualcomm’s total sales including chipset sales and patent fees amounted to US$25.1 billion and its patent fees, US$7.9 billion, accounted for approximately 30% of the sales. The company’s patent fee income in South Korea alone amounts to 1.5 trillion won or so a year. Qualcomm expressed its discontent with the decision right away, mentioning that it would appeal to a higher court without delay.