The Fair Trade Commission (FTC) must name the parties behind its settlement of its anti-trust case against Qualcomm Inc, the Chinese Nationalist Party (KMT) caucus said yesterday.
The commission should also explain how it would ensure that Qualcomm honors its promise to make its chips available to local companies to facilitate the nation’s development of 5G technology, caucus members said at a news conference in Taipei.
The commission in October last year slapped the US semiconductor giant with a fine of NT$23.4 billion (US$761.62 million at the current exchange rate) for refusing to license key patents it has in code division multiple access (CDMA), wideband CDMA and long-term evolution technologies; for hampering market competition; and for signing exclusionary agreements with Taiwanese chipmakers and mobile phone manufacturers to charge royalty fees and sell chips at unfavorable prices in a bid to maintain its monopoly.
The settlement allows the chipmaker to convert a NT$20.67 billion fine into US$700 million investment.
The deal could constitute profiteering on behalf of the firm, since the fine was canceled in return for an equal amount of investment, KMT caucus secretary-general William Tseng (曾銘宗) said.
The settlement runs counter to the commission’s mission of ensuring fair competition; its job is not to attract foreign investment to boost economic development, Tseng said.
The deal is unlikely to promote fair competition between Qualcomm and local chipmakers, and could end up hampering the nation’s development of 5G technology, he said.
The decision to reach a settlement was likely influenced by the Executive Yuan and, if so, the Executive Yuan should be condemned for breaching the commission’s administrative neutrality, he said.
The Ministry of Economic Affairs was not happy that the commission fined Qualcomm, which was likely the reason for the settlement, KMT caucus vice secretary-general Ko Chih-en (柯志恩) said.
The commission, like most Cabinet agencies, cowers in the face of the economics ministry when dealing with issues that could affect economic growth, such as amending the Labor Standards Act (勞動基準法) and the Air Pollution Control Act (空氣汙染防制法), Ko said.
The settlement was a “hairpin turn” on the part of the commission, which last year took a hardline stance when it imposed the biggest fine in its history, she said.
FTC Chairwoman Huang Mei-ying (黃美瑛) needs to explain the rationale for backpedaling on the fine, Ko said.
Minister of Science and Technology Chen Liang-gee (陳良基) has said that he would not allow Qualcomm to only make its low-end technologies available for 5G development, but he is unlikely to honor that pledge, considering the long time frame required to develop 5G technologies, she said.
“Who will be there to oversee Qualcomm if it fails to honor its promise?” Ko asked.
Taiwan was lenient in fining Qualcomm over its antitrust violation compared with China, South Korea and some European countries, and now it is allowing the corporation to “convert its debts into shares,” KMT Legislator Lai Shyh-bao (賴士葆) said.
If the commission’s decision stands, business owners that have been fined or convicted could just make a donation to the Treasury to boost economic development in exchange for the waiving of prison terms, Lai said.
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