Qualcomm, a world leader in communications technology and owner of multiple patents relating to CDMA cellular technology, had its South Korea office raided by FTC officials.
“We have no idea about what they were looking for. They didn’t say what the investigation was all about. They said they were carrying out the proper duty of FTC and asked us to cooperate,” Oh Jae-ha, executive vice president of Qualcomm Korea.
The US Company owns most of the key patents for code division multiple access (CDMA) technology, the second most widely used wireless network standard in the world behind the global system for mobile communications (GSM).
Some analysts say that the FTC raid was due to recent claims by South Korea phone manufacturers such as LG and Samsung.
The claims said that Qualcomm had used its IP in CDMA technology to take advantage of royalty fees. And these royalties are no small thing. Qualcomm currently collects 5.25% of handset sales and 5.75% of handset exports from South Korean manufacturers, such as Samsung Electronics and LG Electronics, but that LG claimed it and several other companies had “friction” with Qualcomm over the royalty rates.
Samsung denied there had been friction with Qualcomm but an LG official said it and other manufacturers had often disputed the royalty rate with the US wireless company. The results of the investigation are still up in the air. We will see in the future what FTC was looking for and whether Qualcomm is guilty or not.