Qualcomm complies: pays $1 billion to settle antitrust dispute in China

Qualcomm complies: pays $1 billion to settle antitrust dispute in China
Yesterday, we talked about Qualcomm having a bit of trouble with the Chinese government – namely, the chip maker has been under a 14-month antitrust investigation, looking into price fixing practices and abuse of its position on the market. The odds were that the case is about to be closed, with Qualcomm being obliged to pay a $975 million fine, as well as lower the rates of royalties it has been collecting for patents, used within the country, by around a third. Well, within hours after these news, Reuters reported that Qualcomm has agreed to the terms, and will be obliging to the terms fully.

Weep not for the silicon slinger, though – while this is a record-breaking fine, Qualcomm is fully aware of what the Chinese market means to it – half of its $26.5 billion revenue has been earned there. Furthermore, being able to freely operate in the country will allow Qualcomm to better meet up-and-comers, such as MediaTek, who has slowly been gaining grounds in the lower range markets.

The whole ordeal caused Qualcomm to drop its yearly forecasts to between $3.57 - $3.76 per share, from $4.04 - $4.34 per share, however, when the fine and one-time expenses are excluded, the company raises the lower end of its previous forecast – from $4.75 - $5.05 per share, to $4.85 - $5.05 per share.

So, Qualcomm will pay a $975 million fine and will, from now on, calculate its royalty rates in China based on 65% of the phone's selling price. This begs the question – will such cases follow in Europe and in the US, seeing as Qualcomm will continue to collect full royalties in these regions?

source: Reuters

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8 Comments

1. tech2

Posts: 3487; Member since: Oct 26, 2012

Samsung: Welcome to the club, m8 ! Oh and just to rub some salt to your wounds, I won't be putting your overheating chipset in my flagship :)

2. Tejas9

Posts: 95; Member since: Feb 02, 2015

Not a good start to 2015. Yet they are admitting their mistake. Let's see whether they deliver in the market.

3. kevin91202

Posts: 642; Member since: Jun 08, 2014

"The odds were that the case is about to be closed, with Qualcomm being obliged to pay a $975 million fine, as well as lower the rates of royalties it has been collecting for patents, used within the country, by around a third." -Paul K. (PA) Another poorly, written article, by PA. So many, errors, so many, commas. Why, not, place, a, comma, after, every, word? The, above, quoted, sentence, has, four, commas, when, only, one, comma, was, necessary. What is PA'S obsession with the comma? Is this an Eastern European thing?

6. Zenzui

Posts: 114; Member since: Feb 13, 2012

Shut up. They were able to make you click the article and make money of it. So whatever you say here is useless to them. We did got the point of the whole story.

8. strudelz100

Posts: 646; Member since: Aug 20, 2014

Agreed. The semi-colon makes you look like a genius and can take over where commas leave off.

4. AfterShock

Posts: 4147; Member since: Nov 02, 2012

QC is going to continue hosing anyone until forced to turn the tap off it would seem.

5. darkoman4

Posts: 183; Member since: May 30, 2014

Not an Eastern European thing. Even in Bulgarian, a coma should have been placed only after "fine".

7. strudelz100

Posts: 646; Member since: Aug 20, 2014

Crooks be stealing.

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