Qualcomm may face huge fine in China

[amoy]

Qualcomm may face huge fine in China - Headlines, features, photo and videos from ecns.cn|china|news|chinanews|ecns|cns

Regulators investigating company's 'monopolistic behavior'

US mobile phone chipmaker Qualcomm Inc may face a fine of up to around 7 billion yuan ($1.13 billion) in China if it is found guilty of monopolistic business practices, State-owned news portal people.cn reported Thursday.

Qualcomm is currently undergoing an anti-monopoly investigation launched by China's National Development and Reform Commission (NDRC) in November 2013.

NDRC official Xu Kunlin said in February that the commission's investigation into Qualcomm is based on feedback from mobile phone makers and industry associations that Qualcomm may have abused its market power and overcharged in China.

The NDRC has confirmed Qualcomm's monopolistic practices and is now investigating its sales data, Shenzhen-based newspaper Securities Times reported on July 25.

Under China's anti-monopoly law, the NDRC can impose fines of between 1 and 10 percent of a company's revenues for the previous year if any monopolistic behavior is proved.

Qualcomm reported $12.3 billion in revenue from China in the financial year ended September 2013, accounting for some 49 percent of its total revenue, according to its financial report released in November.

In the quarter ended June 30, the company reported net profits of $2.24 billion, up 42 percent year-on-year, according to a financial report on July 23.

"China continues to present significant opportunities for us, particularly with the rollout of 4G LTE, but also presents significant challenges, as our business practices continue to be the subject of an investigation by the NDRC," Qualcomm said in a press release on July 23.

Qualcomm's China revenue comes from both smartphone chipset manufacturing and patent licensing. Major mobile phone producers like Lenovo Group Co, Huawei Technologies Co and ZTE Corp are Qualcomm's clients in China.

About 5 percent of the sales of mobile phones that run on WCDMA technology goes to Qualcomm as a licensing fee, people.cn report said.

Qualcomm has faced similar probes before.

In July 2009, South Korea's anti-trust agency the Korean Fair Trade Commission imposed a $208 million fine on Qualcomm for abuse of market power and ordered the US company to stop discriminating against companies using its competitor's products.

Japan also launched similar probe of the company in 2006, and found that Qualcomm had breached antitrust rules.

Chinese authorities have stepped up efforts to look into possible irregularities among foreign companies in China. On Tuesday, the State Administration for Industry and Commerce confirmed that it has launched an antitrust probe of Microsoft Corp.

China Will Label Qualcomm Monopolist, Fine Could Reach $1.2 Bln, Gov't Paper Says - Forbes

 

[esolve]

Samsung is also heavily dependent on Qualcomm
Four years ago, South Korea also fined Qualcomm a huge amount of dollars

Huawei Kirin 930 CPU is said to beat Qualcomm soon. A big breakthrough!!

 

[amoy]

Qualcomm fined $975 million in China

Qualcomm Incorporated, the world's largest chipmaker, announced Tuesday US time that it will pay a fine of 6.08 billion yuan ($975 million).

The National Development and Reform Commission (NDRC) Administrative Sanction Decision found that Qualcomm has violated the country's Anti-Monopoly Law.

"Qualcomm will not pursue further legal proceedings contesting the NDRC's findings," Qualcomm released in a statement.

Qualcomm said it has reached a resolution with the NDRC regarding the regulator's 14 month investigation of the chipmaker under China's Anti-Monopoly Law.

"We are pleased that the investigation has concluded and believe that our licensing business is now well positioned to fully participate in China's rapidly accelerating adoption of our 3G/4G technology," said Derek Aberle, president of Qualcomm. "We appreciate the NDRC's acknowledgment of the value and importance of Qualcomm's technology and many contributions to China, and look forward to its future support of our business in China."
Qualcomm has agreed to implement a rectification plan that modifies certain aspects of its business practices in China to fully satisfy the requirements set by the NDRC. According to the company's press release, the company is disappointed with the results of the investigation but is pleased that the NDRC has approved the company's rectification plan.

Key terms of the rectification plan includes that Qualcomm will offer licenses to its current 3G and 4G essential Chinese patents separately from licenses of its other patents and it will provide patent lists during the negotiation process.

Qualcomm also said it plans to continue to grow its investments and expand collaborations in China, including with China's mobile operators, handset and device suppliers, and within the Chinese semiconductor sector.

 

[nimo_cn]

just finished a Bloomberg sensational article on this issue, the author of the article is more depressed than qualcomm which saw a stock rise after the final decision came out.

qualcomm has been playing on fire in China for quite a long time, many Chinese telecom companies have reported its malpractices to the authority, but China took no move against qualcomm because there was no Chinese substitute to companies like qualcomm if qualcomm threatens to leave.

qualcomm's dominant status is challenged by HUAWEI and ZTE, Chinese government is now more confident in punishing qualcomm.

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