Seoul - South Korea's competition authority on Thursday imposed a 260-billion-won (208-million-US-dollar) fine on Qualcomm Inc, the world's largest mobile phone chip maker, for its use of unfair market practices.

The Fair Trade Commission (FTC) said it had concluded that the US company had abused its dominant position on the South Korean market for CDMA mobile phone chips, a key mobile phone technology.

The fine was the largest the FTC has imposed to date.

Qualcomm charged higher royalties to customers also using products from other suppliers but offered discounts to companies using mostly Qualcomm products, the FTC said.

The company, which owns the rights to the CDMA technology, has around 99.4% of the CDMA modem chip market in South Korea and strengthened its monopolistic position through the unfair practices, the FTC said.

Qualcomm expressed its "deep regret" in a statement but rejected the decision, insisting that its business practices were legitimate.

The company now has the choice of appealing to the FTC or taking the matter to court, the national news agency Yonhap said quoting an FTC official.

South Korea is home to Samsung Electronics Co and LG Electronics Inc, the world's second and third largest mobile phone producers, both of which are Qualcomm customers. (dpa)