Wed, Oct 25, 2017 page11

• ANALYSIS: Watchdog under scrutiny after fining Qualcomm NT$23.4bn

  • By Tzou Jiing-wen / Staff reporter
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  Qualcomm Inc chief executive Steven Mollenkopf on Monday was the butt of several jokes during a discussion forum to celebrate the 30th anniversary of the founding of Taiwan Semiconductor Manufacturing Co (TSMC, 台積電).

  However, those enjoying sticking the boot in would do well to reflect upon the fairness of the NT$23.4 billion (US$773 million) fine the Fair Trade Commission handed the US chipmaker earlier this month.

  If the aftermath of the decision is not handled appropriately, it could turn into a lose-lose situation for all concerned.

  The commission’s investigation into Qualcomm, presided over by Fair Trade Commission Chairwoman Huang Mei-ying (黃美瑛), has been denounced for containing several flaws, which has damaged the reputation of the antitrust body.

  First, prior to the investigation, the South Korean Fair Trade Commission had also conducted a probe of Qualcomm and issued its verdict last year. During the course of the investigation, the antitrust body held seven legislative hearings.

  If the local commission had held similar legislative hearings during its investigation, it would have allowed other government agencies, including the Ministry of Finance, to present their views on the case and the commission would not have made such a fool of itself following its announcement of the ruling on Oct. 11.

  Since the commission did not hold any legislative hearings, it should not have also omitted to hold either public hearings or discussion forums.

  However, this seems to be customary practice for the commission based on past performance.

  During the commission’s inquiry into Advanced Semiconductor Engineering Inc’s (日月光半導體) bid to acquire Siliconware Precision Industries Co (矽品精密) last year, it did hold a public hearing, but in the much more complicated Qualcomm investigation, the watchdog failed to hold a single external meeting.

  The committee set up by the commission to investigate Qualcomm, which consisted of seven members, did not adhere to normal committee conventions.

  Normally, when two or more committee members hold differing opinions to the other members, the committee delays coming to a decision. In the Qualcomm case, three committee members were in disagreement with the decision.

  With only four members in favor of issuing a fine to the company, the committee was split almost down the middle. Despite this, Huang forced through the ruling without consideration of the consequences.

  As an independent antitrust body, it is vitally important that the commission effectively regulates itself to guard against making arbitrary decisions since, due to the power it holds, its potential for inflicting damage is immense.

  Fines issued by the commission must be both fair and reasonable to ensure an equitable outcome for all parties.

  The secretive nature of the commission’s investigation followed by the announcement of the fine clearly demonstrates that the commission incorrectly believes that, as an independent body, it is beyond reproach and can do whatever it likes.

  If the commission is unable to allay the concerns surrounding its investigation of Qualcomm, then a large question mark will hang over the organization for years.
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