The Control Yuan on Tuesday said that it has approved a proposed corrective measure on a settlement agreement reached by the Fair Trade Commission (FTC) and US-based chip designer Qualcomm Inc, saying the deal was inappropriate.
The Control Yuan said in a statement that 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 contravention of an antitrust law.
The Control Yuan added that the settlement reached by the FTC and Qualcomm in August last year appeared hasty and was agreed upon without transparency.
The corrective measure was proposed by Control Yuan members Wang Mei-yu (王美玉) and Chang Kuei-mei (仉桂美), who launched a probe into the settlement that same month.
The Control Act (監察法) states that 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 within two months, the watchdog would question the FTC in writing or summon the officials in charge for questioning.
In August last year, the FTC and Qualcomm reached a settlement to resolve an antitrust dispute for a NT$2.73 billion (US$86.6 million at the current exchange rate) fine, far lower than the record NT$23.4 billion fine initially imposed by the commission in October 2017.
The settlement was reached at the 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 US company with contravening the Fair Trade Act (公平交易法) by taking advantage of its monopoly status and imposed the original 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, start-up and university collaborations, and the creation of an operational and manufacturing engineering center in Taiwan.
Both Wang and Chang said that the fine the FTC had imposed in 2017 was to punish Qualcomm for its contravention 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 original fine.
The FTC said that the agreement was made based on the commission’s professional knowledge of fair competition and its understanding of 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.
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