Qualcomm Incorporated et al. (Law Firm Sejong & three others, Counsel for the plaintiff-appellant)

Fair Trade Commission (Law Firm Gyeongsung, Attorneys Kim Gi-hwan et al., Counsel for the defendant-appellant)

January 23, 2013

1. On December 30, 2009, the Defendant’s corrective order stated in the attached Form, which was issued to Plaintiff Qualcomm Korea Incorporated and Qualcomm Korea Limited Liability Company, and Plaintiff Qualcomm Incorporated’s Paragraph (a) among the corrective order stated in the attached Form, which was issued to Plaintiff Qualcomm Incorporated Ltd. and the attached Form No. 1’s Paragraph (a) is revoked.

2. Plaintiff Qualcomm Incorporated’s remaining claims are dismissed.

3. Of the costs of lawsuit, the part arising between Plaintiff Qualcomm Incorporated and the Defendant out of the costs of lawsuit is borne by Plaintiff Qualcomm Incorporated, and the part arising between Plaintiff Qualcomm Korea Ltd., Ltd., and Qualcomm Korea Ltd. and the Defendant is borne by the Defendant.

The corrective order and penalty surcharge payment order issued by the Defendant to the Plaintiffs on December 30, 2009 shall be revoked.

1. Details of disposition;

A. Status of the plaintiffs

Plaintiff Qualcomm’s 1) In the mobile communication method, India is a U.S. company that manufactures and sells (hereinafter “Plaintiff Qualcomm”) chips and radio transmission chips (RF chips) using this technology at the same time as the owner of the source technology in the (MA) code multiple connection method. Plaintiff Qualcomm’s Co., Ltd. is a company that provides services related to the CD technology royalties in Korea, and Plaintiff Qualcomm’s Co., Ltd. is Plaintiff Qualcomm’s limited liability company. Plaintiff Qualcomm’s limited liability company is a company that carries out business related to the domestic sales of the chips produced by Plaintiff Qualcomm and the provision of services, such as RF chips, and subsequent services.

(b) Structure of the mobile communications market;

Outline of mobile communications-related markets

A person shall be appointed.

As seen in the picture, the market related to the mobile communications starts from the owner of the source technology that developed the relevant telecommunications method. The owner of the source technology generally sets up relevant technologies such as the investigation of cell phone parts, chips, etc., such as the owner of another source technology or the chips, and receives royalties in return therefor.

The manufacture of cell phone parts, such as the chip chip, shall produce parts installed on the cell phone by receiving the license from the owner of the source technology and sell them to the mobile phone manufacturer. As seen earlier, Plaintiff Qualcomm is the owner of the source technology and manufactures and sells the cell phone parts directly at the same time.

The mobile phone manufacture is made by assembling hardware and software to make a mobile phone and pay royalties to the original technology owner for the use of patent technology embodied in a mobile phone.The mobile phone manufacture is selling the mobile phone manufactured to the mobile phone company or consumer, and the mobile phone operator provides the radio communication service to the consumer.

C. The defendant's disposition

The defendant applied Article 3-2 (1) 3 and 5, Article 5, and Article 6 of the Monopoly Regulation and Fair Trade Act on the grounds that the plaintiffs abused the status of a market dominant enterprise as follows, and ordered the plaintiffs to take corrective measures and pay penalty surcharges as stated in the attached Form.

In accordance with whether Plaintiff Qualcomm installed the chips supplied by Plaintiff Qualcomm on the mobile phone manufacturer’s mobile phone, the Plaintiff’s business activities were difficult to be carried out by other competitors who supply the chips by imposing the royalties on the domestic mobile phone manufacturer on a discriminatory basis (i.e., interference with business activities based on price discrimination). (ii) The domestic mobile phone manufacturer conducted an illegal transaction to exclude competitors by offering rebates to Plaintiff Qualcomm’s mobile phone manufacturer based on the degree of purchase of Plaintiff Qualcomm’s chips and RF chips (an exclusive transaction).

[Reasons for Recognition] Uncontentious Facts, Entry of Evidence A No. 1-2, the purport of the whole pleadings

2. Discriminatory imposition of royalties;

(a) Details of activities;

1) Summary of the act

Where a mobile phone manufacturer manufactures and sells a mobile phone in which the CD technology was embodied, he/she shall pay royalties to Plaintiff Qualcomm, which is a CD source technician. The royalties are calculated by multiplying the final sales price of the mobile phone by the royalty imposition rate. However, Plaintiff Qualcomm imposed different royalties depending on whether the domestic mobile phone manufacturer used Plaintiff Qualcomm’s parts as follows.

(ii) discrimination by the part price deduction method for a mobile phone located in the house;

원고 퀄컴은 1993. 8. 31. 국내 휴대폰 제조사인 주식회사 주8) 삼성전자 및 주식회사 주9) 엘지전자 와, 2002. 1. 7. 주식회사 주10) 팬택앤큐리텔 과 각각 CDMA 기술사용에 관한 최초 라이선스 계약을 체결하였다. 그런데 이 계약에는 내수용 휴대폰에 대한 로열티 산정과 관련하여, 로열티 산정의 기준이 되는 휴대폰 최종 판매가격에서 휴대폰 제조사가 원고 퀄컴으로부터 구매하여 장착한 부품들의 CIF 주11) 가격 을 공제한다는 내용이 포함되어 주12) 있었다. 이처럼 로열티 산정의 기준이 되는 휴대폰 판매가격에서 원고 퀄컴으로부터 구매하여 장착한 부품의 가격을 공제할 경우 그 휴대폰 판매가격은 낮아지게 되어 결과적으로 로열티를 할인해 주는 효과가 발생한다. 그런데 이 조항은 다음에서 보는 2004년 라이선스 수정계약에서도 그대로 유지되었다.

(iii)discrimination by reduction in the rate of royalties on mobile phones for export purposes;

In the first license agreement, the royalty imposition rate on the mobile phone for export was 5.75%. However, Plaintiff Qualcomm entered into a license agreement with Samsung Electronic on March 29, 2004 and on July 11, 2004, respectively, respectively, and Plaintiff Qualcomm reduced the royalty imposition rate to 5% on the mobile phone with Plaintiff Qualcomm’s mother chips for export from April 1, 2004, while maintaining the existing 5.75% on the mobile phone with another business operator’s mother chips.

In addition, when entering into a contract for the revision of panty chip with the license on June 30, 2004, Plaintiff Qualcomm decided to apply the royalty imposition rate of 5.0-6.5% according to the quarterly sales in cases where the sales volume per quarter exceeds 100,000 vehicles, with respect to the mobile phones with Plaintiff Qualcomm’s mother chip installed among the mobile phones for export from April 1, 2004.

(iv) discrimination against the upper limit of royalties;

Plaintiff Qualcomm, upon entering into a license revision agreement with Samsung Electronic, ELB, and panty chip in 2004, reduced the upper limit on the royalties from the mobile phone with Plaintiff Qualcomm’s mother chip to USD 25 to USD 20. However, the upper limit on the royalties from the mobile phone with Plaintiff Qualcomm’s mother chip installed by another business entity was maintained as it remains the existing USD 30. This limitation on the upper limit on the royalties is highly likely to be applied to the HH products mainly of the dead schip due to its nature. In particular, in the case of Samsung Electronic Co., Ltd. that produces and sells a large number of dead schi products, the scope of application was over 9% of the total model since 2006.

[Reasons for Recognition] Facts without dispute, Gap evidence 1-2, Gap evidence 12, 13, Gap evidence 17-19, the purport of the whole pleadings

(b) Whether a market dominant enterpriser is;

(i) the relevant market for goods;

A) The defendant's market definition

The Defendant deemed the product market related to the royalty discriminatory imposition as the “patent technology market owned by Plaintiff Qualcomm from among the patent technologies included in the CDA standard” (No. 1-2).

B) Plaintiffs’ assertion

Considering the fact that the CD, GSM, and WMA technology, which are the mobile communications method, provides the same or similar utility at the stage of providing the mobile communications service, the mobile phone manufacturing is controlling the purchase volume of each technology in accordance with the market situation while producing all the mobile phones in which each mobile communications technology is embodied, and the Plaintiffs also engage in GSS or MMA technology to more hold off the CD technology, taking into account these circumstances, the relevant product market should be expanded to all the mobile communications technology markets including GSM and WWMA.

C) Determination

In light of the following circumstances, the Defendant’s determination that the product market related to the instant royalty discrimination imposition act is “patent technology market owned by Plaintiff Qualcomm from among patent technologies included in the CDA standard” is correct, in light of the following circumstances: (a) evidence Nos. 1, 31, 51-2, 52, 82, 83, 32, and 32-2, 51-2, 52, 82, 83, and 32-3 of the evidence Nos. 1-2, 51-2, 52, 82, and 32-3. The Plaintiffs’ assertion disputing this is not acceptable

① There is no compatibility between the mobile communications technology, such as the CDA, GSM, and WMA. Therefore, a mobile phone manufacturer who intends to produce a CD-based mobile phone ought to use the CD mobile technology. Moreover, the patent technology included in the CD-based standard is performing different functions, and there is no compatibility between Plaintiff Qualcomm’s patent technology and the remaining patent technology included in the CD-based standard.

② Since the establishment of the standards for mobile communications is made at the State level, a specific method of mobile communications may not be changed without changing the standards at the State level. However, in Korea, the CDMA method was adopted in 1993 as the second generation mobile communications standard, and the service began since 1996, and the service began only after the period of 2007. Accordingly, at the time of the instant act of imposing the royalty discrimination, the domestic mobile phone manufacturer was bound to produce the CD method in order to supply the mobile phone to the mobile operator and the consumer.

③ Since there is no compatibility between the mobile communications technology and the selection of the standard mobile communications technology is made at the national level, it is not simply a substitution of the quantity to produce the GSM mobile phone instead of the CD method, but a waiver of the CD method mobile phone market.

④ However, given that a considerable level of technological capability is required to manufacture a mobile phone that is embodied with a specific mobile communications technology, a mobile phone manufacturer who has invested enormous funds and human resources in order to develop the CD-based mobile phone market is not likely to waive the CD-based mobile phone market and replace the production quantity of a mobile phone with any other method, such as GSSM, on the ground that the royalty on the CD-based mobile phone technology had been significantly different.

⑤ The actual domestic mobile phone makers request Plaintiff Qualcomm to reduce the price of the CD-based chip as the sales of the CD-based mobile phone decreased by competition with India and Brazil, etc. This shows that from the perspective of the Korean mobile phone manufacturer who was the main product of the CD-based mobile phone, the production of the CD-based mobile phone would not have been easy.

6) Examining the internal data of ELB (Evidence No. 32), the fact that the current status of water transport and purchase by mobile communications method, such as the CDMA, GSM, and WWMA, were identified and the operation plan accordingly was formulated, with respect to the purchase of chips necessary for the manufacture of mobile phones. This supports the recognition of each mobile communications technology and the parts embodied therein as a separate market.

(ii) the relevant regional markets;

With respect to the fact that the Defendant’s regional market relating to the royalty discrimination imposition act is the domestic market, the Plaintiffs should be viewed as the global market.

However, the following circumstances are not clearly disputed by the plaintiffs, or acknowledged as being recognized by Gap evidence 1-2 after collecting the purport of the entire pleadings, namely, there is no technology that can substitute plaintiff Qualcomm's patent technology in another overseas area. Plaintiff Qualcomm denied the third party's transfer and patent licensee's license in relation to his patent technology. In fact, Plaintiff Qualcomm's right to use Plaintiff Qualcomm's CD patent technology cannot be purchased from another overseas business operator, other than Plaintiff Qualcomm, and in fact, Plaintiff Qualcomm's foreign business operator cannot purchase the right to use Plaintiff Qualcomm's CD's CD patent technology. Therefore, considering that even if the fees for the use of the CD patent are raised to a certain extent in the domestic market, it is reasonable to consider the relevant regional market as the domestic market as the domestic market. The plaintiffs' assertion disputing this is rejected.

(iii) A market dominant enterprise;

Among the patent technology included in the CDA standards, Plaintiff Qualcomm’s patent technology market owned by Plaintiff Qualcomm has a market share of 100% does not dispute the Plaintiffs. Therefore, Plaintiff Qualcomm is presumed a market-dominating business entity pursuant to Article 4 Subparag. 1 of the Fair Trade Act (it is presumed that Plaintiff Qualcomm had a market share of 100% with respect to the patent technology owned by Plaintiff Qualcomm, even if the relevant regional market is deemed a global market).

In this regard, the plaintiffs asserts that, considering the characteristics of the mobile communications business with a rapid and rapid technological advancement and competition between technologies, strong large volume purchase of domestic mobile phone devices, strong influence of mobile phone operators, etc., they cannot recognize the market power in Plaintiff Qualcomm.

However, the evidence submitted by the Plaintiffs alone is insufficient to recognize that the legal presumption of Plaintiff Qualcomm’s market dominant business entity with the market share of 100% is extinct, and there is no other evidence to deem otherwise. The Plaintiffs’ assertion is rejected.

(c) Price discrimination;

1) Plaintiffs’ assertion

The instant royalty imposition act is substantially limited to the simple price discount on the cap chips supplied by Plaintiff Qualcomm, and also applied the same conditions to Samsung Electronic, ELB and panty, which are the counter-party to the transaction, and thus does not constitute an act of price discrimination under the Fair Trade Act.

2) Determination

According to Article 3-2(1)3 and (2) of the Fair Trade Act, Article 5(3)4 and (6) of the Enforcement Decree of the same Act, and Article 5(2)4 and (2) of the same Act, IV. 3.4. (2) of the same Act, a market dominant enterprise’s interference with the activities of other enterprises is one of the abuse of a market dominant position by presenting to the other party to the transaction conditions an unreasonable condition in light of normal transaction practices or unfairly discriminatings against the price or transaction terms.

According to this, it is reasonable to view that the act of price discrimination is not limited to the case of price discrimination between two or more buyers, and it also includes the case of price discount on one buyer according to specific conditions, and thus, it does not necessarily mean that it is premised on multiple parties to the transaction. Also, the act of price discrimination can be seen as including the case of price discount on one buyer according to specific conditions.

However, this case’s act of discriminative imposition of royalties differs from the case where a mobile phone manufacturer installed the CDF chips sold by Plaintiff Qualcomm and the case where the mobile phone manufacturer did not do so (in the case where another competitor installs the CDF chips supplied by another competitor), and thus, it is clear that the act of discriminating against the price of the trading partner. The Plaintiffs’ assertion on a different premise is acceptable.

D. Whether Article 5(3)4 of the Enforcement Decree of the Fair Trade Act is unconstitutional

1) Plaintiffs’ assertion

Article 5 (3) 4 of the Enforcement Decree of the Fair Trade Act provides that the Fair Trade Commission shall determine the type of an act unreasonably interfering with the business activities of other enterprisers by public notice, without establishing any standard, so it comprehensively delegates the Fair Trade Commission to determine the prohibited activities by the market dominant enterpriser at discretion and impose criminal sanctions. Therefore, it violates the principle of legality and the principle of prohibition of comprehensive delegation.

2) Determination

Article 3-2(1)3 and (2) of the Fair Trade Act provides for “an act unreasonably interfering with the business activities of other enterprisers” as one of the acts prohibited by the abuse of market dominant position, and the types and criteria thereof may be prescribed by Presidential Decree. Accordingly, Article 5(3) of the Enforcement Decree of the same Act explicitly lists the types of acts unreasonably interfering with the business activities of other enterprisers under subparagraphs 1 through 3, and Article 5(4) of the same Act provides for “an act publicly notified by the Fair Trade Commission as an act that makes it difficult for other enterprisers to perform the business activities by other improper means than those under subparagraphs 1 through 3

In light of the legislative purpose prohibiting the abuse of market dominant position by the Fair Trade Act and the overall contents, structure, etc. of regulations related thereto, and Article 5(3)4 of the Enforcement Decree provides for the basic contents and scope of the contents and scope publicly notified by the Fair Trade Commission in detail, it is reasonable to view that the public interests and judgment with the capacity to distinguish objects can be predicted that the contents to be included in the public notified by the Fair Trade Commission may be included in the public notification from the provisions of the Enforcement Decree. Accordingly, this cannot be viewed as violating the principle of no punishment or the principle of prohibition of comprehensive delegation. The Plaintiffs’ assertion is rejected.

(e) Improper;

(i) the intent and purpose of restricting competition;

A) Plaintiffs’ assertion

The provision on the deduction of parts price for the inland cell phones was introduced at the time of the first license agreement in 1993 based on the standard technology licensing agreement set by the government, and was made upon the request of the domestic mobile phone manufacturer holding a strong margin for the reduction of the rate of royalties on the mobile phone for export and the limited purchase amount of the royalties, and there was no intention or purpose to restrict competition by hindering the business activities of other business operators supplying the chips to the plaintiffs.

B) the facts of recognition

(1) The details of the introduction of the parts price deduction clause and the submission of Plaintiff Qualcomm’s undertaking to FRD

The part price deduction clause of this case existed from the first license agreement that Plaintiff Qualcomm entered into with the domestic mobile phone makers in 1993, which was based on the standard technology introduction agreement that was enacted and operated by the Defendant’s Office for Fair Trade in the Economic Planning Agency, a telegraphic transfer in 1985.

However, at the time of 1993, the Minister of Information and Communication selected the CD method as a standard in the United States in Korea as a next generation mobile communication method, and thereafter, in 1996, the Korea Information and Communications Technology Association (TA) enacted the Korean standards for CDMA mobile communication based on seven patent rights applied by Plaintiff Qualcomm.

Accordingly, on May 11, 1997, Plaintiff Qualcomm, the owner of the CDA source technology, submitted to the Korea Information and Communications Technology Association a letter of undertaking that the Korea Information and Communications Technology Association shall grant the license for the industrial property rights included in the standards for CD mobile communications to the users in a non-exclusive and non-exclusive manner without any unfair discrimination.

This FRND declaration was designed to prevent abuse of patent holders of the technology included in the standard technology, because they could acquire market power in the related market and apply the license differentiatedly.

(2) Market conditions at the time of concluding the license modification agreement in 2004

In the meantime, the use of Plaintiff Qualcomm’s chips only during the period of February 2004, from the second quarter of February 2004, Plaintiff Qualcomm’s use rate of Plaintiff Qualcomm’s chips was reduced to 94% in the third quarter of March 2004.

Samsung electronic chip use ratio was 1.5% in the second quarter of 2003, but in the fourth quarter of 2003, it increased to 3% in the fourth quarter of 2003. Moreover, Samsung electronic chip was released from the KF around May of 2003 by completing the development of the CD200 1X chip, which was installed by itself, around April of 2003.

(3) The process during which the license modification contract was concluded in 2004

Since 2003, the number of overseas sales of domestic mobile phone manufacturers and dead mobile phone sales has increased, and as at the time, royalties that were imposed on domestic mobile phone manufacturers are higher than royalties that were imposed on other foreign mobile phone manufacturers, domestic mobile phone manufacturing such as Samsung Electronic, etc. requires Plaintiff Qualcomm to reduce the royalties on overseas sales mobile phones.

With regard to this, Plaintiff Qualcomm’s intent to lower the royalty imposition rate on the mobile phones for export and lower the royalty limit on the dead mobile phones. In addition, Plaintiff Qualcomm demanded Plaintiff Qualcomm’s purchase of at least 85% of the required purchase amount from Plaintiff Qualcomm, instead, only in the case of using Plaintiff Qualcomm’s chips.

Accordingly, at the end of the negotiations, Plaintiff Qualcomm and the domestic mobile phone manufacturer concluded the agreement to reduce the royalty rates on the mobile phone for export to which Plaintiff Qualcomm’s mother chips were installed, reduced the royalty rates for the mobile phone for export to which Plaintiff Qualcomm’s mother chips were installed, lower the upper limit on the royalty rates on the dead mobile phone with Plaintiff Qualcomm’s mother chips, and added the termination provisions as follows.

(4) Any termination clause under the license amendment agreement of 2004

In 2004, Plaintiff Qualcomm’s contract may be terminated if the mobile phone manufacturer did not purchase Plaintiff Qualcomm’s chips at a certain percentage and at least a certain quantity out of the purchase quantity of the CDM chips. The specific conditions are as follows:

In the event that at least 70% of the annual demand for the CDM chips contained in the main sentence is not purchased from Plaintiff Qualcomm, or that at least 20 million won was not purchased in 2005, 2006, and 25 million won or more in 2006 and thereafter, at least 85% of the quarterly demand for the CDM chips contained in the main sentence, or that at least 85 million won was not purchased from Plaintiff Qualcomm, or that at least 8 million won was not purchased in 2004, 2005, 10 million won in 2005, 2006, and 15 million won or more thereafter.

[Basis] Evidence No. 2-1, 4, 10-19, 72-77, Eul's evidence Nos. 3, 4, 38, and the purport of the whole pleadings

C) Determination

In light of the above facts and the following circumstances revealed, Plaintiff Qualcomm’s intent or purpose is recognized to restrict competition in the domestic MMA200 chips market by imposing the royalties on the domestic mobile phone manufacturer under the license agreement in 2004, thereby making it difficult for other business operators to engage in the business activities of the CD200 chips with respect to the CD200 method, and thereby restricting competition (this case’s royalty discrimination imposition act is not limited to the CD2000 chips, but the Defendant recognized illegality only, so the Defendant is not aware of illegality). The Plaintiffs’ assertion disputing this issue is not acceptable.

① At the time of concluding the license revision contract in 2004, the domestic mobile phone manufacturing business was gradually increasing the purchase amount of the chips supplied by other business operators than Plaintiff Qualcomm.

② Although the instant part price deduction provision was introduced from the time of the initial license agreement in 1993 pursuant to the standard technology agreement, Plaintiff Qualcomm’s patent right was established in 196 based on Plaintiff Qualcomm’s patent right, and accordingly, Plaintiff Qualcomm’s written undertaking prohibiting the imposition of royalties discriminatively, thereby, appears to have been known that the instant part price deduction provision, which imposed royalties on the basis of Plaintiff Qualcomm’s use of Plaintiff Qualcomm’s part part, could not be permitted as it violated the FRND undertaking. Nevertheless, Plaintiff Qualcomm maintained it as it was at the time of concluding the 2004 license agreement.

③ In addition, taking into account the fact that the domestic mobile phone manufacturing industry at the time imposes higher royalties than the foreign mobile phone manufacturing industry, there was only a request for the reduction of royalties. However, Plaintiff Qualcomm limited not only to the case where Plaintiff Qualcomm’s chip is installed with the gymization, but also added the conditions under which the contract can be terminated if Plaintiff Qualcomm did not purchase more than a certain percentage and a certain quantity.

(4) The act of discriminative imposition of royalties constitutes an act that restricts or threatens to restrict competition in the domestic CD200 chips market.

(ii) competition-restricting effects;

The instant royalty discriminatory imposition was made against the same product during the period during which the conditional rebates for the CD2000 chips was offered in the domestic mobile phone makers as indicated below, as determined in the part of the following “the offer of conditional rebates for the food chips”. In addition, it constitutes an act that restricts or threatens to restrict competition in the domestic CD200 chips market.

F. Sub-decision

The Defendant’s measure affirming that the instant royalty discrimination imposition pursuant to Plaintiff Qualcomm’s agreement in 2004 constituted “the act of interference with the business activities of other enterprisers” prohibited under Article 3-2(1)3 of the Fair Trade Act and Article 5(3)4 of the Enforcement Decree of the same Act as the act of abuse of market dominant position by market dominant enterprisers (the Defendant deemed that this part of the act constitutes an unfair trade practice under Article 23(1)1 of the Fair Trade Act, but in relation thereto, the Defendant did not make a decision on the ground that it did not separately issue a corrective order or penalty surcharge order).

3. Providing conditional rebates for the chips;

(a) Details of activities;

1) Summary of the act

Plaintiff Qualcomm offered rebates and Samsung Electronic, subject to the condition that Plaintiff Qualcomm’s products purchase at least a certain percentage or a certain percentage of the total demand for the CD2000 chips in the total quantity of the CD200 chips.

2) The act of offering rebates to ELE

A) Conclusion of a MOU in 2000

Plaintiff Qualcomm concluded a memorandum of Understanding with ELE and performed the following conditions for the purchase of chips from July 1, 2000 to June 30, 2005, Plaintiff Qualcomm offered rebates quarterly and annually in accordance with the purchase quantity of the chips and the purchase ratio of the chips:

Terms and Conditions 1 contained in the main sentence: Purchase from Plaintiff Qualcomm at least 85 percent of the quarterly and annual demand for all the CD-type chips set forth in the main sentence. Conditions 2: Purchase from Plaintiff Qualcomm at least 5 percent of the quarterly and annual demand for the IF/R chips set out.

However, if the amount of the quarterly or annual chips purchase is less than a certain quantity, it was calculated by dividing the ratio of the purchase of IF and RF chips into RFR, RFL, RFL, RFT, RTR, and IF, and if any one of them fails to meet the purchase ratio requirements, the total requirements of IF and RF chips purchase ratio are not satisfied.

If the above three conditions for the purchase of chips are satisfied, Plaintiff Qualcomm offered rebates for rebates pursuant to the following payment standards. The annual total amount of rebates was adjusted by adding or adding the amount of rebates to the annual amount of rebates, if the annual total amount of rebates is different from the annual amount of rebates.

The standards for the payment of fixed amount rebates for the El electronic quarter

00,625 to 65% of 75% of 0,000,005 to 65% of the quarterly chips purchase, 30,005 to 30,005 to 75% of 1,625,000 to 825,000,000 1,031,000,168,000,375,0000 to 1,750,750,000, 2005 to 2,007,005 to 2,000,005 to 305,00,00,005 to 2,005 to 305,00,00,005 to 106,000,218,0001,381,000 to 14,000; and

Note 14) to 1,625,000

The standards for the payment of fixed amount rebates for each year of ELI

0,00,00 to 00,000,000,000 for annual chips of 10,000,000,000 for annual chips of 10,000,00 for 10,00,000 for annual chips of 10,000,00 for 10,00 for 10,000 for 3,500 to 7,000 for 7,000,00 for 3,575,000 for 15,00 for 15,00,00 for 10,00 for 10,00 for 10,00 for 10,00 for 10,00 for 10,00 for 100,00 for 15,00 for 15,000 for 15,00

Note 15) through 6,500,000

B) Conclusion of an incentive contract in 2004

On July 11, 2004, Plaintiff Qualcomm and LF chips concluded a new “chip purchase and incentive contract” on June 30, 2004. According to this, during the period from July 1, 2004 to June 30, 2009, Plaintiff Qualcomm and LF chips were offered rebates at a certain rate for the total purchase of the total chips and RF chips according to the ratio of the purchase of the chips and the ratio of the RF chips installed at LF chips as follows.

The terms and conditions of the purchase of chips and the rate of the payment of rebates chips and rebates

The quarterly installation rate of the Table CDA200 RaF chips contained in the main sentence (ju 17), the ratio of the quarterly purchase of the CD2000 chips (ju 18), from 85% to 95%, from 30% to 75%, from 3.5% to 4% from 3.5% from 3.5%, from 4% from 4.5% to 4% from 4.5% from 4.5% from 4% from 4.5% from 4% from 5

17) Installation rate

Note 18) Purchase Ratio

On August 22, 2005 and December 12, 2005, this Agreement was amended twice. The revised contract is divided into RFR, RFL, RFL, RFT, and RTR. The revised contract includes the content that determines “the quarterly installation rate of CD2000” based on the minimum value.

2) The act of offering rebates to Samsung Electronics

A) Agreement in 1999

Plaintiff Qualcomm entered into a contract with Samsung Industries on May 18, 199, and, during the following period from October 1, 1999 to September 30, 2003, Plaintiff Qualcomm offered a royalty discount at the upper limit of USD 5 million per quarter on the cell phones installed in accordance with the purchase ratio among the total demands for the mother chips (However, the Defendant did not commit this act in violation of corrective order and penalty surcharge).

Terms and Conditions 1 contained in the main text: Purchase from Plaintiff Qualcomm at least 60% of the quarterly demand for all the CDF chips of Samsung electronic. Conditions 2: if the mobile phone sales of Samsung Electronic exceed KRW 10 million, the purchase of at least at least eight million chips from Plaintiff Qualcomm.

USD 80,000,000 for the purchase of the maximum discounted chip demand for the 60-70% of the maximum discounted chip quantity contained in the main text, and USD 5,000,000 for the mobile phones installed with Plaintiff Qualcomm’s chips (5.25% ? 4%) 4,000,000 dollars 70-80% of the demand for the chip chips purchased at least 80,000,000 won

B) Conclusion of a part supply contract in 2004

Upon the termination of the 1999 contract with Samsung Industries on September 30, 2003, Plaintiff Qualcomm entered into a “part Supply Contract” with Samsung Industries on September 27, 2004 at the end of the renegotiation, and paid the rebates amount in accordance with the following payment standards, from September 27, 2004 to September 30, 2007, and from January 1, 2008 to December 31, 2008, where Samsung Industries satisfies the following conditions:

Terms and Conditions 1: Purchase of at least 60% of the quarterly demand for each CDS chips contained in the main text. Conditions 2: Purchase of at least 70% of the quarterly demand by aggregating all the CDAS chips.

Criteria for the payment of rebates of chip rebates to Samsung Electronic

0 to 6,250,000,000 to 7,500,000,000 to 00,000,000,000, 6,500 to 7,500,000,000,000 for all the quarterly chips purchased, which are 70% or more, but 95% or more to 5,000,00 or more than 95% or 00% or more,00 to 5,000,00,000,000 to 00,50,000,000,50,000,007,000 to 8,750,000,750,000 to 40,000,000 to 400,500,0008,500 or more;

In addition, after the conclusion of the 1999 contract on September 30, 2003, the negotiations between Plaintiff Qualcomm and Samsung Electronic for the re-contract were delayed, and the parts supply contract was concluded only on September 27, 2004, which was about one year after September 27, 2004, which was about one year after the conclusion of the re-contract. Accordingly, Samsung Electronic paid USD 2.5 million for the total amount of USD 10 million for each quarter from Plaintiff Qualcomm for the condition that at least 80% of the quarterly demand for the quarterly CD200 method chips was purchased.

C) Conclusion of a contract for rebates related to the Rodrid chip rebates in 2005

On June 28, 2005, Plaintiff Qualcomm entered into a “SMA mobile phone-related contract” with Samsung Electronic, and provided rebates chip m6000 using the CD200 method and rebates chip rebates in accordance with the following payment criteria:

The purchase period included in the main sentence of Table ○○ purchase period: from July 1, 2005 to December 31, 2005: The purchase period is required to use at least 95% of the demand for three chips for CD2000 for Plaintiff Qualcomm’s products during the purchase period: With respect to the 6000 chips and 6025 chips set up on the mobile phone sold to a mobile phone operator after purchasing from Plaintiff Qualcomm during the purchase period, the amount exceeding $8.01 out of the average purchase price of chips chips 6000 to exceed $9.56 out of the average purchase price of chips chips chips 6025 to be refunded.

Note 22) chips chips

[Reasons for Recognition] The facts without dispute, Gap evidence 1-2, 23-26, 30, 157, Eul evidence No. 41, and the purport of the whole pleadings

(b) Whether a market dominant enterpriser is;

(i) the relevant market for goods;

The Defendant determined that the product market related to the offering of conditional rebates on the cap chips was “the CD200 chip market”.

The plaintiffs asserts that the relevant product market should be expanded not only to the CD200 chip market, but also to the GSM and WMA chip market for all mobile communications technology, including GSM and WMA chips, on the grounds as shown in the aforementioned LMA discriminatory imposition act.

However, as seen in the part regarding the LMA200 type chips as already examined, it cannot be deemed that the CD200 type chips are substituted by other mobile communications technology chips, such as GSM and WMA methods. Therefore, the Defendant’s measure that regards the relevant product market as the MMA200 type chips market is justifiable. The Plaintiffs’ assertion disputing this cannot be accepted.

(ii) the relevant regional markets;

With respect to the Defendant’s determination of the regional market related to the instant act of offering conditional chip rebates as the domestic market, the Plaintiffs asserted that the relevant regional market should be deemed the global market on the grounds that both the manufacturer of major chips and the mobile phone manufacturers are global companies that supply and demand the goods in the whole world; the Korean mobile phone manufacturers import most of the chip; the Plaintiff’s mobile phone manufacturers import of the chip; the transport of the chip at low cost by fchips, which is small and low, can be transported at low cost; and it is easy

However, in light of the following circumstances, the Plaintiff does not clearly dispute the Plaintiff, or the Plaintiff’s overall purport of the statement and the entire argument as set forth in subparagraph 1-2, the Defendant’s measure that regards the relevant regional market as the domestic market is correct (including not only the Plaintiff’s measure, but also the Plaintiff Qualcomm’s share in the global market exceeds 50%, and as seen below, it is presumed that Plaintiff Qualcomm is in the market dominant position, and thus, it does not affect its conclusion.

① The mobile phone chip market is a direct trade market between the mobile phone manufacturer and the mobile phone manufacturer, which is the other party to the transaction, and the manufacturer of the mobile phone chips strictly prohibits the resale of the mobile phone chips

② There is a significant difference in the price for CD200 chips in Korea, the United States, and Japan by region, such as the difference between 20% and 20%.

(3) Since the mobile phone manufacturers are carrying out the mobile phone development project by obtaining continuous technical cooperation and information from the technology for the chips with which they possess the information, it is very technically difficult to replace the mobile phone already developed or the mobile phone chips entered in the mass production with other manufacturers’ chips.

(4) In light of the above circumstances, even if the domestic representative purchaser’s chip price sold in the Republic of Korea increases to a certain extent for a considerable period of time, it is deemed impossible to purchase the chip price in another overseas market corresponding thereto.

(iii) A market dominant enterprise;

Comprehensively taking account of the overall purport of the argument in the statement in Eul evidence 61, it is confirmed that Plaintiff Qualcomm’s global share in the CD200 method chip market as of 2006 is 87%, the share in the domestic CD200 method chip market is 98%, and the market share in the domestic CD200 method chip market was also similar during the period in which the rebates of the instant chip was offered.

Therefore, regardless of whether the relevant regional market appears to be the domestic market or to be the global market, Plaintiff Qualcomm's share in the CD200 chip market is much more than 50% and is presumed to be a market-dominating business entity in accordance with Article 4 subparagraph 1 of the Fair Trade Act.

The plaintiffs asserted that the competition between the CD standards and GSM standards was not recognized in many countries, and the competition between the mobile phone service market and the mobile phone sales market, which is the lower market, affected the mobile phone parts market, which is the upper market, and considering the mass purchase power of the Korean mobile phone manufacturers, such as the ability to convert the purchase of other parts into the products of the mobile phone manufacturing, or the ability to reduce the demand for the CD method products, by increasing the investment and production ratio of the other parts manufacturing industry.

However, even if all evidence are collected by the Plaintiffs, it is difficult to view that the legal presumption of Plaintiff Qualcomm’s market dominant entrepreneur with the market share as seen earlier is reversed, and there is no other sufficient evidence to acknowledge it. The Plaintiffs’ assertion is rejected.

(c) Exclusive transactions;

1) Plaintiffs’ assertion

The rebates of the chip rebates offered by Plaintiff Qualcomm to the mobile phone manufacturer on the condition that the competitor did not purchase the chips produced by the competitor, or did not compel Plaintiff Qualcomm to purchase the chips, and merely offered Plaintiff Qualcomm’s opportunity to discount the price of the chips. As such, the instant offering of the chip rebates does not constitute “the case where the other party to the transaction makes a transaction on condition that the other party does not trade with the competitor.”

2) Determination

Article 3-2(1)5 (former part) and (2) of the Fair Trade Act, and Article 5(5)2 (2) of the Enforcement Decree of the same Act prohibit a market-dominating enterpriser from trading with a competitor unfairly “the condition that the other party does not trade with a competitor.” In light of the language and text of the relevant provision and the legislative purpose of “promotion of competition in a monopoly and monopoly market,” etc., “requirements for not trading with a competitor” include not only cases where a market-dominating enterpriser is established by unilateral and forced business but also cases where it is established by an agreement with the other party to the transaction, if it is recognized that the transaction has a de facto binding force that restricts the transaction of the other party to the transaction, and it also includes not only cases where the entire prohibition of the transaction with a competitor business entity is made, but also some

In light of the following circumstances where Plaintiff Qualcomm’s offering of the rebates chip rebates of this case constitutes a de facto binding act on the Plaintiff’s domestic mobile phone manufacturing business, and constitutes “the transaction partner where the transaction partner makes a transaction with a competitor on the condition that the transaction partner does not make a transaction with a competitor” in light of the aforementioned legal principle and the following circumstances revealed as to the evidence as seen earlier and the evidence adopted. The Plaintiffs’ assertion disputing this is without merit.

(1) Conditions for purchasing at least a certain ratio of demand.

Plaintiff Qualcomm offered rebates to the domestic mobile phone manufacturer on the condition that he/she purchases a certain percentage of the total quantity of the chips at least from Plaintiff Qualcomm. This is the same as the condition that he/she does not purchase at least a certain percentage of the total quantity of demand from other competitors, and thus, at least the same time, set a condition that does not trade with competitors at least a certain percentage of the total quantity of demand. In other words, the rebates of the instant chips does not amount to the condition that the mobile phone manufacturer purchases more than a certain percentage of the total quantity of the chips purchased during a certain period, thereby allowing a mobile phone manufacturer to purchase more than a certain percentage of the total quantity of the chips that he/she purchased.

(2) The structure of rebates payment

The rebates of the chips of this case is a structure that, once a mobile phone manufacturer pays the original price, purchases the collected chips, and achieves the condition of the payment of rebates, “purchaseing at least a certain percentage” out of the total quantity of demand, the rebates was offered retroactively, and as the purchase ratio increases, the payment rate of rebates has increased gradually.

Such a structure of the payment of rebates is not only to induce mobile phone manufacturers to purchase more than the minimum purchase ratio in order to receive the rebates, but also to continuously increase the purchase volume even if the minimum purchase ratio is met, thereby maximizeing the shock effect and making it difficult for competitors to change their purchase.

(3) de facto monetary sanctions.

The chip price determined through the negotiation between Plaintiff Qualcomm and the mobile phone manufacturer is determined on the premise that the rebates will be offered later. As such, the fact that a mobile phone manufacturer’s mobile phone manufacturer did not receive rebates because he/she failed to meet the purchase ratio condition constitutes monetary sanctions, and at the time, the Plaintiff’s local compliance or mobile phone manufacturer appears to have been aware of such fact. Furthermore, it is difficult to accept that the mobile phone manufacturer’s waiver of the rebates received by the competitor is difficult to accept.

(4) Arm's length price

Unlike the case of offering rebates after setting the transaction price higher than the arm’s length price, Plaintiff Qualcomm’s transaction price was not higher than the arm’s length price, and thus, Plaintiff Qualcomm’s purchase at the arm’s length price even if the rebates was not offered. However, in light of the aforementioned point, the Plaintiffs asserted that the rebates of this case is not subject to compulsory or binding. However, in light of the foregoing, it cannot be deemed that there is no binding effect on the rebates of the chip of this case

(d) Improper;

(i) the relevant market;

The relevant market, which is at issue due to the abuse of market dominant position, may include not only the market to which the market dominant enterpriser or competitor belongs, but also the market which supplies raw materials, parts, semi-finished goods, etc. necessary for the production of the goods in such market, or the market which produces new goods after being supplied with the goods produced in such market (see Supreme Court en banc Decision 2002Du8626, Nov. 22, 2007). Thus, the related market with which the effect of restricting competition is recognized by the abuse of market dominant position and the related market with which the effect of restricting competition is at issue by the abuse of market dominant position does not necessarily coincide. In addition, the competition protected by the Korean

Therefore, even if Plaintiff Qualcomm’s market for recognizing the market dominant position is deemed a global market, if the act of imposing the royalty discrimination in this case and the act of offering the chip rebates were to have an objective to artificially affect the market order by restricting free competition in the domestic CD200 chip market, and if it is evaluated that such act was an act that could have an effect on such competition restriction, the illegality of the act should be recognized.

(ii) the intent and purpose of restricting competition;

A) The plaintiffs' assertion

The act of offering the rebates of the chip of this case is an act of price discount for the chips, and thus, the mobile phone manufacturer first requested price discount on the premise of mass purchase, and accordingly, decided to reflect the existing purchase volume through the limited negotiation with the mobile phone manufacturer. Such rebates was generally adopted by the mobile network industry, and was for competition with the GSM, which is another mobile network method, did not intend or purpose to restrict competition.

B) Determination

In general, the act of offering the rebates of the instant chips constitutes a so-called exclusive dealing with the transaction partner on condition that the transaction partner does not make any transaction with the competitor, and thus, such act itself constitutes an intention or purpose to restrict competition (see Supreme Court Decision 2007Du22078, Jul. 9, 2009). In addition, in full view of the facts acknowledged earlier and the following circumstances where Plaintiff Qualcomm knew the descriptions of the evidence Nos. 28, 33, 34, 11, 15, and 39, Plaintiff Qualcomm provided the rebates with the intent or purpose to restrict competition in the domestic MMA chips market. The Plaintiffs’ assertion disputing this is not acceptable.

① The time when the contract on the offering of the rebates of the chips of this case was concluded was time when Plaintiff Qualcomm’s domestic market share was likely to decline because both the competitor of the chips of this case developed new chips, or the mobile phone manufacturer extracted the mobile phone with the competitor’s chips installed.

② At the time, the domestic mobile phone manufacturer only requested the offering of rebates, and the addition of the aforementioned conditions was based on Plaintiff Qualcomm’s demand.

③ In particular, according to the Plaintiffs’ internal documents, the primary motive of Samsung Samsung Rod rebates in 2005 seems to have been aimed at maintaining and strengthening Plaintiff Qualcomm’s exclusive position by checking VA, which began to have the competitiveness in the maternity chip market at the time.

④ As in the instant case, it is difficult to find out in addition to Plaintiff Qualcomm, the case where rebates is paid depending on whether the mobile communications industry purchases at least a certain percentage of the total demand.

(5) As seen below, the offering of the rebates of chips is limited or likely to restrict competition in the domestic CD200 chips market.

(iii) competition-restricting effects;

In light of the following circumstances, the instant act of offering rebates chips of this case, as seen earlier, constitutes an act that restricts competition or is likely to have an effect of restricting competition in the domestic CD200 chips market, along with the act of imposing the royalty discrimination as seen earlier, in light of the following circumstances that can be seen by comprehensively taking into account the descriptions of the evidence Nos. 33, 34, 48, 93, 114, 115, 136, and Nos. 1, 6, 8, 9, 11-13, 15, and 17-19.

(A) the timing and duration of the imposition of royalties discrimination and rebates;

The offer of royalties discriminatory imposition and the offering of the gift chip rebates was all intended to restrict competition in the domestic CD200 type chip market, and as a whole, the period overlaps as follows. Such long-term offering of rebates has been conducted for a period of about nine years as follows. Such long-term offering of rebates seems to be sufficient for the Defendant to act as an entry wall in the market (as regards the royalty rebates offered to Samsung electronics from 1999 to 2003, the Defendant did not act as the subject of the instant disposition; however, it may be considered that the Defendant did not act as the subject of the instant disposition; however, such act as such royalty rebates, which resulted in the occurrence of the blocking effect on Samsung electronics, thereby recognizing competition-restricting effect in that the competitor of the chips in the period of the offering of the rebates for the rebates for the said period, could not actually find any consumers who can substitute EL electronic in the domestic market.)

A person shall be appointed.

* The broom part is a compensation payment period for losses incurred due to the delay in the conclusion of a re-contract

(b)the degree of price discount;

In light of the technology and production capacity of the competitor at the time, most of the chips that the competitor could supply were the Rodd product, and the main competition with Plaintiff Qualcomm was made. However, the rebates for the chips paid by Plaintiff Qualcomm was related to the total amount of the CD200 method chips. Therefore, if the competitor intends to properly compete in the concurrent sector (Rod Product group), the mobile phone manufacturing would be deprived of the purchase conversion, and the price of the chips would be reduced to the extent that the mobile phone manufacturing would be able to compensate for the illegal portion (ND product group) which would be lost due to the purchase conversion. However, the price competition between the manufacturer of the chips in the Rod Products group is limited to approximately one US dollars, and thus, it was practically impossible for the competitor to respond to the competition. In other words, the rebates for the chips in this case was strengthened in the nature of restricting competition based on the non-conforming demand.

Moreover, since 2004, as seen above, as royalties discrimination imposition is applied in overlap with the offering of rebates, the width of price reduction increases, and such effect has become stronger and strong.

In this regard, the Plaintiffs asserted that the offer of royalty discounts and rebates has the effect of discounting the price of the chip, and that, insofar as the discounted price exceeds the cost, it should be viewed as a legitimate price competition, since it does not constitute an act of creating a false price.

However, the act of offering the instant royalty discrimination and conditional rebates is not merely limited to the discount of the price of chips, but also does not merely constitute the act of price discrimination or binding conditions attached to the price discount, because Plaintiff Qualcomm, who has the absolute market power of 100% in the e-mail technology licensing market, discriminates against the price depending on whether he purchases chips supplied by using his status, thereby hindering other enterprisers’ business activities, and added binding conditions to purchase at least a certain percentage of the total demand, thereby restricting competition in the relevant market by excluding competitors. Thus, the act of restricting competition cannot be seen as the act of price discount (unfair salt). In other words, the act of restricting competition in this part is not just a price discrimination or binding condition attached to the price discount, as well as a price discrimination or binding condition. Accordingly, the Plaintiffs’ assertion that this part of the act is unfair or unreasonable merely because the actual selling price of the chips discounted by offering the royalty discount and rebates was higher than the cost. Furthermore, this part of the Plaintiffs’ assertion cannot be accepted without examining this part.

C) Degree of the market salary chain;

Plaintiff Qualcomm made it practically impossible for business competitors to secure alternative trading lines that can create the economy in the domestic market of the CD200 chips by imposing royalties on Samsung Industries and Samsung Industries, the quantity of which is more than 80% in the domestic market of the CD200 chips, and providing them with conditional rebates, thereby offering Plaintiff Qualcomm’s chips. (In this regard, the Plaintiffs asserted that Plaintiff Qualcomm’s competitor could have secured alternative trading lines abroad, but, as long as it is recognized that competition-restricting effect, i.e., competition is restricted or restricted in the Korean market, it is not necessary to consider whether business competitors could be free competition abroad).

D) Plaintiff Qualcomm’s market share

Plaintiff Qualcomm shown the market share of 99% in the domestic CD200-type chip market prior to 2004, and subsequently reduced to a certain level of 98% before and after 2004 (i.e., the license revision agreement and the rebates agreement in 2004). However, Plaintiff Qualcomm continued to reduce the market share of 99% to 100% after 2004. This shows that business competitors were virtually excluded from the domestic CD200-type chip market during the period of the offering of the rebates and the royalty discriminatory imposition.

(e) Resignation of genetic competitors;

The survey of the CD200 type chip is not only Plaintiff Qualcomm but also Plaintiff Qualcomm, Inc., in the United States, VA, and Samsung Electronic, EON, and Korea. However, as Plaintiff Qualcomm’s market share in the domestic market, they did not have a significant scale in the domestic market during the period of the instant royalty discriminatory imposition and the offering of the reproduction chip rebates. In particular, in the case of VIA, the sales of chips continued in the foreign market, including the increase of the sales volume from January 5, 2004 to November 5, 2009. Considering that Plaintiff Qualcomm also recognized Plaintiff Qualcomm as a competitor with the history of VI, Plaintiff Qualcomm, etc., it is difficult to conclude that the Plaintiffs submitted the pertinent royalty imposition and the offering of rebates chip rebates to the domestic market, but it is difficult to conclude that the Plaintiffs failed to enter the domestic market.

(f) the opportunity and decrease of consumer choice and diversity;

As such, as the entry of competitors into the domestic market is virtually obstructed, the opportunity of mobile phone manufacturers and the selection of cell phone consumers is significantly low, and the diversity of products is also reduced.

4) Determination on the plaintiffs' assertion

A) argument on the effect of competition

The Plaintiffs asserted to the effect that, as Plaintiff Qualcomm supplied chips to Samsung Electronic and LSB at the lowest price in the whole world, there was no harm or risk of monopolyization, and the price of the chips has continuously decreased, the output amount has increased rapidly, and that there was a pro-competitive effect, such as double globalization and under-investment problems through the provision of rebates, etc., the performance and quality of the chips have rapidly improved and the provision of rebates, and thus, the effect of restricting competition cannot be recognized.

However, in light of the various circumstances as seen earlier, it is difficult to readily conclude that the evidence submitted by the Plaintiffs alone did not have any risk of harm to monopolyizing the instant royalty discrimination and the offering of the gift chip rebates, or did not have any other sufficient evidence to deem that the effect of resolving double emulation and under-investment problems exists. Moreover, the price decline, output increase, performance improvement, etc. are the general phenomenon in the mobile communications market, and such circumstance alone does not necessarily lead to an anti-competitive effect that can offset the foregoing anti-competitive effect. The Plaintiffs’ assertion is rejected.

B) Claim for the statute of limitations of disposition

The Plaintiffs asserted that the “Saeter rebates 2000” was terminated by the agreement as of June 30, 2004, and five years have passed since the instant disposition was issued. Therefore, the statute of limitations expired.

However, according to the facts acknowledged above, since the "Maz rebates 2000" and the "Maz rebates 2004" were for the same purpose on the basis of a single intent and continued to have been implemented without being cut off, it is reasonable to deem the overall act as an abuse of market dominant position. Therefore, this part of the plaintiffs' assertion on the premise that the "Mazp rebates 2000" and the "Mazp rebates 2004" are separate acts is not accepted.

5) Sub-decisions

The Defendant’s act of offering the forward chip rebates of this case constitutes “an act of unfairly excluding competitors” under the former part of Article 3-2(1)5 of the Fair Trade Act, which is the act of abuse of market dominant position by market dominant enterprisers.

4. Offering conditional rebates on RF chips;

(a) Details of activities;

1) The act of offering rebates to ELE

The rebates offered to ELS is a method of determining the amount of rebates in accordance with the purchase quantity or ratio of the two kinds of products in connection with the purchase conditions of the cap chips and the purchase conditions of the RF chips. The rebates offered to ELS is a method of determining the amount of rebates in accordance with the aforementioned purchase quantity or ratio of the two kinds of products.

2) The act of offering rebates to Samsung Electronics

On November 8, 2005, Plaintiff Qualcomm entered into an “RF parts-related contract” with Samsung Electronic, and from July 1, 2005 to June 30, 2006, Plaintiff Qualcomm offered rebates on the basis of the quarterly installation rate of RF chips with respect to RF chips with the method of RF chips from July 1, 2005 to June 30, 2006. The quarterly rebates amount was calculated on the basis of [the average sale price of RF chips - the average sale price of RF chips - the total purchase price of RF chips x the total purchase price of RF chips]. The base price of RF chi chips was determined in accordance with the following standards:

Methods of calculating the standards for rebates chip rebates for Samsung Electronic

본문내 포함된 표 조 건 RF칩 기준가 RFT 장착률 〈 30% or RFR 장착률 〈 75% or RFL 장착률 〈 75% - RFT 장착률 ≥ 30% and RFR 장착률 ≥ 75% and RFL 장착률 ≥ 75% $3.65 RFT 장착률 ≥ 50% and RFR 장착률 ≥ 85% and RFL 장착률 ≥ 85% $3.50 RFT 장착률 ≥ 70% and RFR 장착률 ≥ 95% and RFL 장착률 ≥ 95% $3.35

This means that the rebates should be provided only if each product satisfies the installation rate in excess of a certain ratio.

3) The act of offering rebates to panty houses

Plaintiff Qualcomm entered into a “porton-related contract” with panty on December 1, 2005, and entered into a “porton-related contract,” from July 1, 2005 to December 31, 2006, Plaintiff Qualcomm offered a fixed amount of rebates according to the purchase volume of the CD200 method, from July 1, 2005 to December 31, 2006. The amount of rebates was determined as follows, depending on (i) RFR600, 6120, 6125, 6125, 2) (ii) RFL600, 6100, 6120, and 6120-year average purchase volume:

Methods of calculating the standards for rebates chip rebates for panty chip

The average of the quarterly purchases to 2,500,000 to 2,500,000 to 2,900,000 to 3,200 to 3,200,00 to 3,200,000 to 0.8 US$00 to 0.91.0

[Reasons for Recognition] No. 1-2, Gap evidence No. 23, 24, 54, and 55

(b) Whether a market dominant enterpriser is;

(i) the relevant market for goods;

The Defendant recognized the product market related to the act of offering conditional rebates as the “RMA2000 chip market”.

The plaintiffs asserts that the market for the relevant goods should be expanded to the RF chip market for all mobile communications technology including the MA2000 method as well as the MA2000 method, on the same grounds as the LF chip in the aforementioned LMA.

However, as examined in the part of LMA200’s discriminatory imposition act, it cannot be said that the CD200 method is a substitute relationship with the RF chips of other mobile communications technology, such as GSS and WMA method. Therefore, it is proper that the Defendant considers this part of the product market as the RF chip market, and the Plaintiffs’ assertion disputing this point is unacceptable.

(ii) the relevant regional markets;

As to this part of the regional market, the Plaintiffs asserted that the relevant regional market should be seen as the global market, as in the part of the offering of the chip rebates.

However, as seen earlier, even if the price of the RF chips increases to a certain extent in the domestic market for a considerable period of time, the Defendant’s measure that considered the domestic market as a related regional market is proper, and the Plaintiffs’ assertion disputing this is not acceptable (in addition, in light of Plaintiff Qualcomm’s overall purport of oral argument in 2005, 206, 2006, and 200, Plaintiff Qualcomm’s share in the market for RF chips were 91%, 88%, 95%, and 95%, respectively, and even if it is confirmed that the remainder of the period for which the RF chips were offered for rebates was offered, the market share of Plaintiff Qualcomm’s relevant regional market is presumed to have exceeded 50%, even if Plaintiff Qualcomm’s market share was deemed to have been acknowledged as a global market.

(iii) A market dominant enterprise;

Plaintiff Qualcomm’s share in Plaintiff Qualcomm’s CD200 method market exceeds 50%, regardless of whether the relevant regional market appears to be the domestic market or to be the global market, and Plaintiff Qualcomm’s share in the domestic market is much more than 50% (the share in the domestic market during the period of the offering of rebates for the instant RF chips is 71% to 91.9%). Plaintiff Qualcomm is presumed to be a market-dominating business entity pursuant to Article 4 subparag. 1 of the Fair Trade Act.

As to this, the Plaintiffs asserted that Plaintiff Qualcomm did not have the market dominant power on the same ground as the portion on which the rebates chip rebates was offered. However, the evidence submitted by the Plaintiffs alone is insufficient to deem that the presumption of market dominant business entity with the above market share was reversed, and there is no other evidence to prove otherwise. The Plaintiffs’ assertion is rejected.

(c) Exclusive transactions;

The Plaintiffs’ assertion on this part and the determination thereof are identical to the Plaintiffs’ assertion on the part of the provision of the chip rebates and the determination thereof, and thus, the same is invoked except for the replacement of the chip to the chips.

(d) Improper;

1) Determination

In full view of the following circumstances, the act of offering rebates chips of this case to artificially affect the market order by restricting free competition in the market, and the act of objectively evaluating the act of restricting competition is deemed to have conducted an exclusive dealing that can be objectively assessed as an act that is likely to cause the effect of such restriction on competition, and thus, is unreasonable. The Plaintiffs’ assertion on this issue is rejected.

(A) the purpose and manner of the transaction;

This case's act of offering the rebates is a binding conditional act as seen earlier, and therefore there is a high room to view that the act itself has the intention or purpose to restrict competition.

In addition, the rebates offered to ELB is the structure of offering rebates only when each condition is satisfied by linking the purchase quantity of the cap chips and the purchase ratio of the RF chips. Therefore, a competitor who supplies the RF chips is entitled to compete only to reduce the price of the RF chips to the extent that he/she would compensate for the loss of the rebates on the cap chips. Since the RF chip price is merely 20% of the cap chips and it is practically impossible to accept such price, it eventually causes the effect that the market is obstructed for competitors.

However, the structure of the payment of rebates linked with a strong competition-restricting chip and a RF chip was not presented first by ELE. Plaintiff Qualcomm also offered rebates to Samsung Electronic, but thereafter, it did not set the conditions for the payment of rebates by refusing Samsung Electronic to “unfair, illegal, without fairness.”

In light of this point, the act of offering the rebates of the instant RF chip was derived from the purpose of maintaining and strengthening the exclusive status by excluding competitors in the domestic MF chip market.

B) Period of offering rebates

RF chip rebates was provided to LBE for a long period of up to nine years from July 2000 to July 2009. Such long-term offering of rebates would serve as an entry barriers to competitors. Under an agreement, the period during which the RF chip rebates for domestic mobile phone manufacturing is provided is as follows:

A person shall be appointed.

* In fact, Samsung Electronic shall be limited to the quarter of April 2005, and panty house shall meet the conditions for the payment of rebates only until June 30, 2006, and the rebates was paid only for that period.

C) Degree of the market salary chain;

The domestic CD200 mobile phone manufacturing market is a system with a market share of at least 40%, respectively, of the ELE and Samsung electronics. Therefore, only the provision of the rebates to ELE and the provision of the rebates to ELE would have a market chain effect of at least 40% in the domestic CD200 method RF chip market. In fact, ELE purchases Plaintiff Qualcomm’s products at a level of at least 96% to 100% except in the case of temporary decline of 83% in 2004 during the period of offering the rebates chip rebates.

D) Plaintiff Qualcomm’s market share

The market share in the domestic market of Plaintiff Qualcomm’s CD200 method during which the rebates of the instant RF chip was offered is as follows.

The share of 2002 2003 2004 2005 2006 2007 2007 2008 91.4% 91.9% 77.1% 82.7% 83.5% 71.5% 71.2%

According to this, the market share has decreased in 2004, and the market share has risen again in 2005, this is consistent with the time when the contract was entered into with the ELE and the ELE to enter into the "Sazin rebates 2004" and the rebates was offered to Samsung Electronic and panty house.

Although the market share has decreased to 71.2% in 2008, it still shows a very high market share.The high market share can be said to occupy a large part of the supply monopoly for ELE.

(e) reducing consumer choice opportunities and diversity;

Since the offering of rebates to ELB alone prevents competitors from entering the domestic market more than 40%, it seems that the opportunity for the mobile phone manufacturer and the users of the mobile phone will be low and the diversity of products will also be reduced.

2) Determination on the plaintiffs' assertion

The plaintiffs asserted that the act of normal price discount is not established as in the portion of the rebates chip rebates, and that there existed the effect of pro-competitive competition, and that the period of extinctive prescription has expired, but all of the claims are not acceptable in the same purport as determined in the part of the rebates chip rebates.

E. Sub-decision

It is justifiable to view that the Defendant’s act of offering rebates for the instant chips constitutes “an act of unfairly excluding competitors” under the former part of Article 3-2(1)5 of the Fair Trade Act as an abuse of market dominant position by market dominant enterprisers.

5. Penalty surcharge;

(a) Objects subject to imposition of penalty surcharges;

Plaintiff Qualcomm asserts that each of the instant acts is the price at the ordinary method in the intermediate remarket according to the demand for price discount of mobile phone manufacturing, and Plaintiff Qualcomm did not recognize the illegality of the act, and thus, Plaintiff Qualcomm did not have obtained unjust enrichment. In light of the fact that there was no restriction on competition and consumer welfare increase, etc., Plaintiff Qualcomm’s each of the instant acts cannot be subject to penalty surcharges.

However, in light of the facts acknowledged earlier, it is difficult to acknowledge that there are such circumstances as alleged by Plaintiff Qualcomm, and there is no evidence to deem otherwise that the Defendant imposed a penalty surcharge on the instant act of offering the cap chip rebates and the RF chip rebates deviating from and abused discretionary power (the Defendant did not impose a penalty surcharge on the act of offering the cap chip rebates in relation to the act of offering the cap chip rebates). Plaintiff Qualcomm’s assertion is rejected.

(b) Relevant sales;

1) Calculation of the Defendant’s relevant sales amount

From July 1, 2000 to July 15, 2009, the Defendant recognized Plaintiff Qualcomm’s entire sales amount of the CD2000 method chips sold by Plaintiff Qualcomm in the domestic market and the entire sales amount of the CD200 method chips as each relevant sales amount (Evidence A-2).

2) Determination as to Plaintiff Qualcomm’s assertion

A) Plaintiff Qualcomm asserts that: (a) the relevant sales should be individually assessed for each mobile phone manufacturer who actually received rebates; and (b) the period during which rebates was offered only to ELzers does not have the effect of restricting competition; and (c) Plaintiff Qualcomm asserts that the relevant sales should not be included in the relevant goods because there is no competition with competitors except for RoN chips and Tx chips in competition with competitors.

However, each of the instant rebates offering acts was subject to restrictions or concerns over competition in each of the respective markets, and the same applies to the period during which rebates was offered only to the EL branch operators. As seen earlier, it was reasonable to view that the sales of the CD200 type chips and the RF chips generated in each of the relevant markets were directly or indirectly affected by the offering of rebates during the period of rebates offering. Plaintiff Qualcomm’s assertion cannot be accepted.

B) Plaintiff Qualcomm asserts that, even though the rebates’s rebates was terminated on March 31, 2009, Plaintiff Qualcomm asserted that the sales amount up to July 15, 2009, the last day of the Defendant’s deliberation, as the relevant sales amount, was illegal.

However, according to the evidence evidence evidence No. 159, Plaintiff Qualcomm and ELB were acknowledged that only for the first time on October 9, 2009, Plaintiff Qualcomm and ELB concluded “the “the “the “sway rebates agreement” in 2004” to be retroactively terminated as of March 31, 2009. Therefore, Plaintiff Qualcomm’s assertion, which was premised on the premise that the contract was terminated prior to July 15, 2009, which was recognized by the Defendant as the termination date, is not acceptable.

C) Plaintiff Qualcomm asserts that the chips purchased by an overseas corporation of the domestic mobile phone manufacturer are irrelevant to the domestic market, and that the chips installed on the mobile phone for export in a foreign country should be excluded from the relevant goods, since there is no impact on the interest of Korean consumers or the national economy.

However, with respect to the fact that the sales of the collected chips and the RF chips directly purchased by an overseas subsidiary of the domestic mobile phone manufacturer among the relevant sales computed by the Defendant, the evidence submitted by Plaintiff Qualcomm alone is insufficient to acknowledge it, and there is no other evidence to acknowledge it.

In addition, even chips installed on a mobile phone for export of overseas mobile phones shall be deemed sales generated in the domestic market, so long as the domestic mobile phone manufacture was purchased in the domestic market, the relevant sales should be included as a matter of course. This part of Plaintiff Qualcomm’s assertion is rejected.

(c) Standards for imposition, ratio of executive officers, and reduction or exemption;

The Defendant: (a) committed each of the instant acts by Plaintiff Qualcomm’s instant act, which is highly likely to exclude or block potential and present competitors; (b) the average annual sales amount for three years is at least KRW 1,000,000; and (c) assessed the very serious violation by taking into account the fact that the relevant market is nationwide; (b) subsequently, the adjusted penalty surcharge is increased by 10% on the ground that Plaintiff Qualcomm’s executive officer was directly involved in the violation; and (c) the adjusted penalty surcharge calculated as such is recognized as a penalty surcharge without reduction on the ground that the relevant violation does not seem remarkably excessive in light of Plaintiff Qualcomm’s real ability to pay, the effect of the relevant violation on the market, and the social strike, etc. (Evidence A-2)

Plaintiff Qualcomm asserts to the effect that such measures by the Defendant were unlawful. However, even based on all evidence submitted by Plaintiff Qualcomm, it is not recognized that the Defendant’s above measures were erroneous, or violated the principle of proportionality and equality, thereby deviating from and abusing discretionary power. The Plaintiff Qualcomm’s assertion in this part is not acceptable.

Plaintiff Qualcomm asserts that there exists a reason for mitigation, as Plaintiff Qualcomm actively cooperates with the Defendant’s investigation, and that a penalty surcharge should be considered to have been unfairly increased on the wind that the period of investigation becomes long-term due to the Defendant’s inefficient investigation. However, the evidence submitted by Plaintiff Qualcomm alone is insufficient to acknowledge it, and there is no other evidence to acknowledge it. Furthermore, it cannot be deemed that the Defendant did not consider the amended circumstances of the penalty surcharge notice during the period of investigation in calculating the penalty surcharge, solely on the sole basis that the Defendant did not consider the amended circumstances during the period of investigation

(d) Conversion of won currency;

After calculating the penalty surcharge in US dollars, the defendant applied the exchange rate as of the date of the agreement of the defendant ( July 23, 2009) and decided the amount converted into Korean won as the final penalty surcharge (Evidence A 1-2).

Plaintiff Qualcomm asserts that such a measure is unlawful. However, in light of the fact that whether to impose a penalty surcharge on Plaintiff Qualcomm or the amount of a penalty surcharge is specifically fixed when the Defendant decided to impose a penalty surcharge, and that the exchange rate is changing from time to time, and thus, the rapid increase in the exchange rate at any time, or that applying the exchange rate at any time is disadvantageous to Plaintiff Qualcomm is merely an obvious circumstance. In this case, there is no data to regard that the Defendant, in particular, failed to choose the base period disadvantageous to Plaintiff Qualcomm, it is difficult for the Defendant to find that there was an error of deviation and abuse of discretionary power, and there is no other evidence to deem otherwise. Plaintiff Qualcomm’s assertion cannot be accepted.

6. Corrective order;

A. Plaintiff Qualcomm Koreacom and QCTK

In addition to Plaintiff Qualcomm, the Defendant issued a corrective order in the attached Table to Plaintiff Qualcomm and QCK (No. 1-2).

As to this, Plaintiff Qualcomm and QCK asserted that since they cannot be the subject of each of the instant offenses, they cannot be the other party to the corrective order.

The instant royalty discrimination application and conditional rebates offer are both based on the contract entered into by Plaintiff Qualcomm with the mobile phone producer. The company that produces and sells original technology owners, the chips, and the rF chips is not in the position of Plaintiff Qualcomm, and Plaintiff Qualcomm and QCK are not in the position of performing such act. Therefore, resolving the illegal state arising from each of the instant illegal acts can only be done, and Plaintiff Qualcomm and QCK may not be deemed to have independently committed each of the instant illegal acts, regardless of Plaintiff Qualcomm and QCK in the near future.

In light of the above, in order to resolve the past illegal state or prevent the same illegal act, such as each of the instant violations in the near future, it is necessary to issue a corrective order with Plaintiff Qualcomm in addition to issuing a corrective order with respect to Plaintiff Qualcomm, and QTCK as indicated in the separate sheet, and it is also necessary to consider it as an effective and appropriate means. There is no other evidence to deem otherwise. Accordingly, the corrective order with respect to Plaintiff Qualcomm and QTCK is all unlawful.

B. Part of parts price deduction

In relation to the LMA200 chips, the Defendant recognized that the part price deduction clause is “parts” purchased from Plaintiff Qualcomm merely because only “the CD200 chips” in relation to the royalty discriminatory imposition act constitutes an act that has the effect of economic restrictions, but the subject of the prohibition in subparagraph 1(a) of the attached Table No. 1 as “the part purchased from Plaintiff Qualcomm” (Evidence 1-2).

In addition to the language and text of such corrective order, Article 1-b of the corrective order, as well as Article 1-2 of the former Act, is the product that is purchased from Plaintiff Qualcomm, and Article 1-2 of the former Act explicitly specifies the subject of the prohibition in paragraph (c) as “sMA2000 chips”, the term “part” referred to in Article 1-1(a) of the instant corrective order appears to refer to “all parts purchased from Plaintiff Qualcomm,” not limited to “sMA2000 chips” but to “all parts purchased from Plaintiff Qualcomm. Therefore, this part of the corrective order is unlawful since it prohibits the excessive portion of the violation.

(c)a given percentage or a given quantity;

The Defendant issued a corrective order that the act of unfairly excluding competitors should not be conducted by providing economic benefits to “the conditions under which the chips or RF chips are used in a certain percentage or in a certain quantity,” in relation to the act of offering rebates for each of the instant cases (No. 1-2).

Plaintiff Qualcomm asserts that Plaintiff Qualcomm’s “a certain percentage or a certain quantity exceeding a certain percentage” cannot be specified specifically, and thus contravenes the principle of clarity and proportionality.

However, in light of the contents, purpose, and effect, etc. of each of the instant conditional rebates acts that can be seen from the aforementioned factual basis, it appears that such corrective order could sufficiently be recognized as to which act against Plaintiff Qualcomm was prohibited, and thus, it does not violate the principle of clarity or the principle of proportionality. Plaintiff Qualcomm’s assertion is rejected.

7. Conclusion

Of the instant disposition, the part regarding Plaintiff Qualcomm’s Article 1’s (a) among the corrective orders as indicated in the separate sheet against Plaintiff Qualcomm Korea and QTCK and the part regarding Plaintiff Qualcomm’s Article 1’s (a) among the corrective orders as stated in the separate sheet against Plaintiff Qualcomm should be revoked illegally. As such, whether to issue the corrective order or to what extent the corrective order should be imposed belongs to the Defendant’s discretion, even if only a part of the specific corrective order is illegal, the entire corrective order should be revoked. As such, Plaintiff Qualcomm’s claim on this part is lawful, and the remainder is dismissed

[Attachment]

Judges Ansan-jin (Presiding Judge)

Note 1) hereinafter referred to as “Plaintiff Qualcomm”).

Note 2) hereinafter referred to as the “MMA”).

3) The mobile phone is a mobile phone part that alters the voice of a person who is an Arabic signal into a digital signal and gives and receives appropriate codes so that a mobile phone can communicate with the CD-based method, or that performs the opposite function; hereinafter referred to as “fchips”).

Note 4) The high-frequency, which received and received from the base station, is a mobile phone part that alters the details of the low-frequency which can be processed through the mix or that performs the function opposite thereto; hereinafter “RF chips”).

Note 5) hereinafter “Plaintiff Qualcomm Koreacom.”

Note 6) Plaintiff QCTK

Note 7) The Fair Trade Act (hereinafter referred to as “Fair Trade Act”).

Note 8) hereinafter referred to as “Trisung Electronic”.

Note 9) hereinafter referred to as “ELE.”

Note 10) hereinafter referred to as “panty house”).

Note 11) CIF: Price terms including freight, insurance, etc.

Note 12) hereinafter referred to as “part Price Deduction Clause.”

Note 13) hereinafter referred to as “Meter rebates” in 2000.

Note 14) It was limited to the beginning year, and from this rhym, more than 2 millions were used as the minimum standard.

Note 15) It was limited to the beginning year, and rhyth to the minimum limit of 8 million won.

Note 16) hereinafter referred to as “Meter rebates” in 2004.

Note 17) The term “mM6xxxxxxxxx chips from the total RF chips used in the CD200 mobile phones, which were purchased by LF chips from the Plaintiff.

Note 18) The ratio of mmM chips purchased from the Plaintiff to the entire chips used in the sold CD2000 mobile phones means the ratio occupied by the Plaintiff.

Note 19) The model name of the CD200 method chips means the model name of the CD200 method.

Note 20) hereinafter referred to as “Trrier rebates.”

Note 21) hereinafter referred to as “Trod rebates”.

Note 22) chip set up by means of mM60 XX, RFR6122, and RFT6122.

This is because the mobile phone manufacture is competition in the mobile phone market even on the mobile phone with the chip in the non-conforming part.

Note 24) hereinafter referred to as “RF chip rebates”.

Note 25) hereinafter referred to as “TF chip rebates”

Note 26) The term “RFL200, RFR6000, and RFT6100.”

Note 27) hereinafter referred to as “panty chip rebates”.