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Qualcomm could face a billion dollar fine from the Chinese government

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China's anti-monopoly regulator, theNDRC, could fine US chip-making giant Qualcomm more than $1 billionon charges of monopolism. The agency received reports that Qualcomm"abuses its dominant position in the market and chargesdiscriminatory fees." In one such case, the China MobileCommunications Industry Association filed a complaint against thechip-maker for overpricing its patent licenses.

The Chinese government beganinvestigating Qualcomm late last year, following evidence ofprice-fixing. Last November, it conducted raids in the company'sBeijing headquarters and its Shanghai offices. The San Diego-basedchip-maker has been cooperating with the investigation. LastDecember, Chinese officials met William Bold, Qualcomm's senior vicepresident for government affairs, and Fabian Gonell, vice presidentand counsel for technology licensing. According to spokeswomanCheistine Trimble, the company intends to "continue cooperatingfully with the NDRC". However, details about the investigationwill remain confidential.

Analysts state that any possibleresolution will involve Qualcomm lowering patent licensing fees forChinese customers, and paying a fine. Under Chinese anti-monopolylaw, the NDRC can confiscate between 1 to 10% of the company'srevenues for the previous fiscal year.

The Chinese government's ongoingconsumer protection efforts have stretched to foreign companies fromall industries, including tech firm InterDigital Inc, pharmaceuticalgiant GlaxoSmithCline, and food maker Danone. They have all facedsimilar scrutiny in suspicion of anti-competitive practices.

source: Reuters

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