Taiwan's Control Yuan passes corrective measure on FTC-Qualcomm settlement

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CNA file photo

CNA file photo

The Control Yuan said Tuesday it has approved a proposed corrective measure on a settlement agreement reached by the Fair Trade Commission (FTC) and U.S.-based chip designer Qualcomm Inc., saying the deal was inappropriate.

In a statement, the Control Yuan said the settlement agreement took the FTC only 10 months to reach, replacing an earlier decision that the commission spent two years and eight months making after an investigation that ended in the imposition of a massive fine for Qualcomm's violation of Taiwan's anti-trust law.

The Control Yuan added that the settlement reached by the FTC and Qualcomm in August 2018 appeared hasty and was agreed upon without transparency.

The corrective measure was proposed by Control Yuan members Wang Mei-yu and Chang Kuei-mei (仉桂美), who launched a probe into the settlement that same month.

According to the Control Act, as soon as a corrective measure has been taken, the FTC should make improvements or take other action and then reply to the Control Yuan in writing.

If the FTC fails to make any improvement and the Control Yuan does not receive a reply in two months, the watchdog will question the FTC in writing or summon the officials in charge for questioning.

In August 2018, the FTC and Qualcomm reached a settlement to resolve an antitrust dispute for a NT$2.73 billion fine, far lower than the record NT$23.4 billion fine initially imposed by the commission in October 2017.

The settlement was reached at Taiwan's Intellectual Property Court, where Qualcomm filed an appeal against the FTC's heavy fine.

Following an investigation into Qualcomm launched in 2015, the FTC charged the U.S. tech giant with violating Taiwan's Fair Trade Act by taking advantage of its monopoly status, and imposed the massive fine.

Qualcomm had paid NT$2.73 billion to the commission in several installments up to the time of the settlement.

Under the settlement agreement, Qualcomm agreed not to claim the money it has paid to the FTC and also committed to a five-year investment plan covering 5G collaboration, market expansion, startup and university collaborations, and the creation of an operational and manufacturing engineering center in Taiwan.

Both Wang and Chang of the Control Yuan said the fine the FTC had imposed in October 2017 was to punish Qualcomm for its violation of the law but the settlement was to facilitate investment in Taiwan.

The two members said the purposes of the two were different, so it was not right for the FTC to use the settlement as a means to cancel the massive fine.

In response, the FTC said the settlement with Qualcomm was in the public interest.

The FTC said the agreement was made based on the commission's professional knowledge of fair competition and its understanding of the complicated competition law.

The FTC added that although the settlement was reached at a closed-door hearing at the Intellectual Property Court, it was based on the law governing intellectual property assets.