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South Korean anti-trust regulators raided the Seoul offices of Qualcomm, the US wireless chipmaker said on Wednesday, apparently to investigate claims that?the San Diego-based firm had abused its market dominance.
The raid is the latest in a string of actions against American technology companies operating in Korea, including Microsoft and Intel, with the competition watchdog saying it is trying to ensure Korean IT companies have the chance to grow.
Officials from the Fair Trade Commission searched Qualcomm?s offices in Seoul on Tuesday but did not explain why, said Oh Jae-ha, a senior director at Qualcomm?s Korean unit.
?They didn?t mention anything specific ? they said they just wanted to investigate Qualcomm?s business practices,? Mr Oh said. ?Your guess is as good as mine.?
The FTC declined to confirm that it had raided Qualcomm.
Qualcomm supplies chips to South Korean mobile phone manufacturers including Samsung Electronics and LG Electronics. Analysts say Qualcomm collects royalties of 5.25 per cent on local handset sales and 5.75 per cent on exports from Korean manufacturers, but there have been reports of friction between Qualcomm and the mobile phone makers over these fees.
Qualcomm licences code division multiple access (CDMA) technology, the second most widely used wireless network standard in the world after global system for mobile communications (GSM). Although CDMA is the standard in South Korea, Samsung and LG Electronics export GSM phones. In November, Qualcomm and Samsung signed an agreement under which the Korean company makes Qualcomm?s chips used in CDMA cell phones on a contract basis.
The action against Qualcomm follows the FTC?s unannounced visit to the Seoul offices of Intel, the world?s largest chipmaker, in February over alleged unfair business practices against Korean hardware makers.
Microsoft last month appealed the FTC?s December order that the US software maker should separate its Media Player and instant messaging programmes from its operating system. The commission also fined the company Won33bn for abusing its dominant position in the South Korean market.
The FTC on Wednesday said it had established an advisory group to check whether Microsoft was complying with its order. The group, comprising professors, a lawyer and a business executive, would guarantee ?fairness and legitimacy? in Microsoft?s compliance with the antitrust ruling, the watchdog said.