Qualcomm faces probes in US, Europe on top of China investigation

China's investigation disrupted Qualcomm's patent licensing business

Chipmaker Qualcomm is facing regulatory investigations in the U.S. and Europe in addition to an ongoing anti-monopoly probe in China.

The company is struggling to collect royalties from its patent licensees in China, which accounts for half of its revenue. It hasn't helped that

Chinas National Development and Reform Commission (NDRC) has been investigating Qualcomm for the past year over complaints that it overcharges clients on patent fees.

"Our results were negatively impacted by the challenges we are facing in China," Qualcomm said Wednesday in its fiscal fourth quarter earnings report. It added that certain unlicensed clients in China are delaying business with Qualcomm because of NDRC's investigation.

Qualcomm and the Chinese government have not indicated when the anti-monopoly investigation might conclude. According to the rules, NDRC could end up imposing a fine up to 10 percent on the company's prior year's revenue. The company made US$26.5 billion in revenue during fiscal 2014.

On Wednesday, Qualcomm also revealed that the U.S. Federal Trade Commission started probing it in September over allegations that Qualcomm had breached its patent licensing agreements.

The European Commission began investigating the company in October over the use of rebates and financial incentives in the sales of its chips.

Both investigations could lead to fines on the company, or restrict its business, the company said.

As for China, Qualcomm said that certain clients continue to dispute or underreport the royalties owed to the company. The country is a major manufacturer of smartphones and tablets. Because of the conflicts with its Chinese customers, Qualcomm is forecasting that over 200 million device shipments won't be reported to the company for the calendar year of 2014.

Qualcomm is perhaps best known for its Snapdragon chips found in many popular smartphones, but it has also a large business licensing its patents.

China's anti-monopoly probe concerns how Qualcomm collects those royalties, and also its policy of only selling its chipsets to customers who pay the patent fees, the company said. In addition, Chinese authorities are also looking into allegations of whether the company refused to grant patent licenses to certain chip manufacturers.

Last month, another top Chinese regulator, the Ministry of Industry and Information Technology, said it welcomed a Qualcomm expansion in the country. But added that the U.S. company should also lower its patent fees.

In the fiscal fourth quarter, Qualcomm's revenue was up 3 percent year-over-year, reaching $6.7 billion. Net income also grew by 26 percent from last year, and reached $1.9 billion.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags governmentregulationlegalprocessorsqualcommintellectual propertypatentComponents

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Michael Kan

IDG News Service
Show Comments

Cool Tech

SanDisk MicroSDXC™ for Nintendo® Switch™

Learn more >

Breitling Superocean Heritage Chronographe 44

Learn more >

Toys for Boys

Family Friendly

Panasonic 4K UHD Blu-Ray Player and Full HD Recorder with Netflix - UBT1GL-K

Learn more >

Stocking Stuffer

Razer DeathAdder Expert Ergonomic Gaming Mouse

Learn more >

Christmas Gift Guide

Click for more ›

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?