China fines Qualcomm $975 million for monopolistic business practices

Qualcomm will settle the fine, and modify some business practices in the country

China has fined Qualcomm about $US975 million for engaging in monopolistic business practices, and the chipmaker has agreed to modify some of its business practices in the country as part of the settlement.

Qualcomm said it is disappointed by the results of the investigation, but will not contest the findings and will pay the fine.

China's National Development and Reform Commission had been investigating Qualcomm for engaging in possibly anti-competitive behavior by overcharging device makers in the country. Qualcomm's Snapdragon chips go into many smartphones, and its wireless technology is licensed for use in a majority of 3G, 4G and LTE modems.

Last year the company said that the probe was disrupting its business in China, and making it harder to collect royalties.

Qualcomm will likely have to renegotiate licensing deals with local companies at lower prices, analysts said in interviews conducted prior to the confirmed news that a settlement was reached.

China is trying to create a favorable business environment for local device makers and semiconductor companies as the country aims to become self-reliant in technology, said Jim McGregor, principal analyst at Tirias Research. Qualcomm has no choice but to play within the controlled business environment, which is less-than-ideal for foreign players, McGregor said.

Cheaper licensing rates could help Chinese companies market even lower-cost handsets, a segment where they are already taking over a growing share of worldwide smartphone shipments.

Licensing and royalty business practices come under close inspection by the Chinese government, said Dean McCarron, principal analyst at Mercury Research.

He cited the example of China's approval of the Microsoft purchase of Nokia last year. One of the conditions for approval was Microsoft not increasing the patent licensing fees following the acquisition.

For Qualcomm, it's just best to pay the fine and move on.

"You wouldn't want something like this hanging over you for years," McCarron said.

Agam Shah covers PCs, tablets, servers, chips and semiconductors for IDG News Service. Follow Agam on Twitter at @agamsh. Agam's e-mail address is agam_shah@idg.com

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags business issueslegalqualcommintellectual property

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

Agam Shah

IDG News Service
Show Comments

Brand Post

Bitdefender 2019

Shop safely with our award-winning security solution. Protect yourself this Black Friday and get the exclusive Black Friday discount for Bitdefender 2019!

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Maryellen Rose George

Brother PT-P750W

It’s useful for office tasks as well as pragmatic labelling of equipment and storage – just don’t get too excited and label everything in sight!

Cathy Giles

Brother MFC-L8900CDW

The Brother MFC-L8900CDW is an absolute stand out. I struggle to fault it.

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Featured Content

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?