If it were not enough that Qualcomm (QCOM) is fighting with its largest customer Nokia (NOK) and it is in litigation with its rival Broadcom (BRCM) and Texas Instuments (TXN) has filed an antitrust claim against it with the EU, now South Korea has begun an antitrust probe into the wiresless chip company’s practices in that Asian country.
According to The New York Times: "More than 80 percent of the country’s 48 million people carry cellphones, all based on Qualcomm technology." In other words, it is a fairly big market if Qualcomm has an IP problem there.
Worse, if the EU or South Korea or the ITC rule that Qualcomm has abused monopoly power, it is probably more likely that the other venues will levy similar charges as well.
Qualcomm is in the kind of trouble that Microsoft (MSFT) had with the EU and other authorities but the cell chip company does not have MSFT’s resource. QCOM also has very large competitors and customers like TI and Nokia. And, they would love to dent Qualcomm’s ability to charge high licensing fees for its technology.
It’s getting worse at QCOM and the stock price is likely to reflect that.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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