"Substantial" evidence accuses Qualcomm of price-fixing in China, but is China secretly “fixing” the chip-maker?

"Substantial" evidence accuses Qualcomm of price-fixing in China, but is China secretly “fixing” the chip-maker?
American chip-maker Qualcomm Inc. has gotten an unfortunate mention in a China Daily report on the expansion of the People's Republic's Antitrust office. Apparently, the company which was recently voted the 13th best place for work in the USA, and has been very successful with its Snapdragon mobile chip-sets, is under investigation for price-fixing by China's National Development and Reform Commission.

The silicone giant is aware of the Chinese antitrust probe since late November, and allegedly collaborated with the NDRC in the investigation, although it states that it hasn't been informed of charges for violating anti-monopoly law. However, Xu Kunlin, head of the department of price supervision at the agency, said that the probe obtained "substantial evidence against" Qualcomm. No further details are available at the moment, as such matters usually are kept confidential.

However, a little digging behind the scenes uncovers an elaborate web of political and business interests, with Qualcomm's market pursuits and Chinese carriers' plans for nation-wide LTE deployment at its core. Allegedly, the three largest Chinese telecoms – China Mobile, China Unicom, and China Telecom are preparing to invest more than $16.4 billion dollars in the infrastructure and equipment needed to deploy LTE networks across the country next year. Seeing that all three of them are state-owned, it's not exactly surprising that the Chinese government will not allow a foreign company to simply show up with its fancy technology and reap an easy fortune.

Too easy, in fact, as according to Alen Lin from BNP Paribas in Hong Kong, Qualcomm is projected to remain the sole chip-set provider whose solutions can support both 3G and 4G handsets, at Chinese market scale, for the first six to nine months of 2014. Other notable manufacturers, such as Broadcom, Intel, Nvidia, and even MediaTek are yet to catch up with competitive products, although the latter is allegedly set to reveal an octa-core LTE-compatible chip-set in January. This is likely to be a game-changer for the growing Taiwanese manufacturer, and another formidable threat to Qualcomm's Chinese pursuits.

While that's hardly enough to scare an enterprising American company away, Chinese government intervention may crack open another can of worms. In recent months, the People's government has increased its efforts to use market power to promote local software and hardware manufacturers. Affiliated organizations have spent nearly $3 billion on buying Chinese mobile chipmakers Spreadtrum Communications Inc and RDA Microelectronics Inc, whose technology competes with Qualcomm's.

With all of this taken into account, the ongoing anti-trust probe suspiciously looks like a government machination to ensure China's technological industry will gain an upper hand in negotiations ahead of the 4G expansion.

Source: China Daily via Reuters, more

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17 Comments

14. AfterShock

Posts: 4147; Member since: Nov 02, 2012

Volatile times ahead.

13. rusticguy

Posts: 2828; Member since: Aug 11, 2012

Price fixing scandal by foreign companies in China fololowed by Chinese authorities going after them isn't new in China. haven';t you heard of price fixi9ng scandal by milk-formula companies of US in China and how they looted ? Good if any govt gets after cartel and price fixing issues. Milk-Formula giants had toi cust price by 20% in China after they were caught.

9. tedkord

Posts: 17544; Member since: Jun 17, 2009

I just wish all companies would pull out of China totally. Why must we keep appeasing this tyrannical government that practices protectionism, manipulates it's currency and oppresses it's people? China is a parasitic entity. Let it collapse through isolation, and maybe the people will revolt and rebirth the nation as one that is a credit to the world.

10. rd_nest

Posts: 1656; Member since: Jun 06, 2010

They should do that first in US. China is among the world's oldest civilization. Whereas civilization and US doesn't mix at all. They are atleast much better than the slavery system you guys had.

12. McLTE

Posts: 922; Member since: Oct 18, 2011

Haha.. RD.. can I have some of what you are smoking? Seriously.. it must be really good stuff!

15. ollienightly

Posts: 37; Member since: Jul 23, 2013

So you are saying the cases against Chinese companies like Huawei, ZTE and Lenovo were normal even with absolutely no excuses other than "security concerns" that they can't prove. And what with Qualcomm's de facto monoply as a fact, the Chinese government are doing evil? They could just do the same by quoting the US Prism and save themselves the trouble, and you'll have nothing to say. What a hypocrite of you!

4. rd_nest

Posts: 1656; Member since: Jun 06, 2010

So, it's all conspiracy when chinese does that. but all fine and dandy when US does this each and everytime. They way they did this against Huawei. Favoring apple against samsung in every case. good that the chinese are doing so. get those suckers out of china and kick their sorry arse badly. these us companies deserve no better. it's a good thing that china has become so powerful now. US will think twice before saying anything against them. and to the author of this article, "go suck it". you do the same, you should be ready to get the same treatment in reply.

11. McLTE

Posts: 922; Member since: Oct 18, 2011

yeah, because the world really needs a more powerful Chinese government. Not.

3. Taters

Posts: 6474; Member since: Jan 28, 2013

Funny how huawei and this weak conspiracy article with no facts is taken at face value but when all the sketchy things US companies like Apple and soon to be owned by a US company Nokia pull this sketchy stuff they are only protecting their innovations. Sure PA, sure.

5. rd_nest

Posts: 1656; Member since: Jun 06, 2010

my thoughts exactly.. +1.5

8. PapaSmurf

Posts: 10457; Member since: May 14, 2012

Nailed it. +1

1. AppleHateBoy unregistered

I wish India's government was this loyal towards it's citizens. China is growing because they have such a good government. Darn it!

2. ArtSim98

Posts: 3535; Member since: Dec 21, 2012

Sarcasm? Nothing against China, especially the people are very nice and friendly, but the government is just so bad and corrupted. I mean seriously. I wouldn't call it democracy, even if the government it self says so.

6. tacarat

Posts: 854; Member since: Apr 22, 2013

I wish we could deal with our corrupt politicians the way they do after a full blown corruption scandal. http://news.bbc.co.uk/2/hi/6286698.stm

7. ArtSim98

Posts: 3535; Member since: Dec 21, 2012

Lol. Well that's kinda sad. And one thing with China's government is that it won't allow anybody to say No to it. If somebody does, in to the jail he/she goes!

17. tacarat

Posts: 854; Member since: Apr 22, 2013

Well, that's why I'd only advocate that one, teensy, example ;)

16. vijaysivakula

Posts: 229; Member since: Aug 17, 2011

How can that be a democracy when they have only one party and a dictatorial style of functioning?

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