Menu
China fines Qualcomm $975 million for monopolistic business practices

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

Follow Us

Join the New Zealand Reseller News newsletter!

Error: Please check your email address.

Tags business issuesintellectual propertylegalqualcomm

Featured

Slideshows

Educating from the epicentre - Why distributors are the pulse checkers of the channel

Educating from the epicentre - Why distributors are the pulse checkers of the channel

​As the channel changes and industry voices deepen, the need for clarity and insight heightens. Market misconceptions talk of an “under pressure” distribution space, with competitors in that fateful “race for relevance” across New Zealand. Amidst the cliched assumptions however, distribution is once again showing its strength, as a force to be listened to, rather than questioned. Traditionally, the role was born out of a need for vendors and resellers to find one another, acting as a bridge between the testing lab and the marketplace. Yet despite new technologies and business approaches shaking the channel to its very core, distributors remain tied to the epicentre - providing the voice of reason amidst a seismic industry shift. In looking across both sides of the vendor and partner fences, the middle concept of the three-tier chain remains centrally placed to understand the metrics of two differing worlds, as the continual pulse checkers of the local channel. This exclusive Reseller News Roundtable, in association with Dicker Data and rhipe, examined the pivotal role of distribution in understanding the health of the channel, educating from the epicentre as the market transforms at a rapid rate.

Educating from the epicentre - Why distributors are the pulse checkers of the channel
Kiwi channel reunites as After Hours kicks off 2017

Kiwi channel reunites as After Hours kicks off 2017

After Hours made a welcome return to the channel social calendar last night, with a bumper crowd of distributors, vendors and resellers descending on The Jefferson in Auckland to kickstart 2017. Photos by Maria Stefina.

Kiwi channel reunites as After Hours kicks off 2017
Arrow exclusively introduces Tenable Network Security to A/NZ channel

Arrow exclusively introduces Tenable Network Security to A/NZ channel

Arrow Electronics introduced Tenable Network Security to local resellers in Sydney last week, officially launching the distributor's latest security partnership across Australia and New Zealand. Representing the first direct distribution agreement locally for Tenable specifically, the deal sees Arrow deliver security solutions directly to mid-market and enterprise channel partners on both sides of the Tasman.

Arrow exclusively introduces Tenable Network Security to A/NZ channel
Show Comments