US chipmaker accused of abusing its dominant market position and could face up to $1bn in fines
Qualcomm could be facing up to $1 billion in fines after a Chinese anti-monopoly watchdog confirmed it is investigating the company over claims the chip-maker abused its dominant market position to overcharge on fees in the country.
The National Development and Reform Commission (NDRC) has received complaints that the San Diego-based firm is charging higher prices in China than it does in other countries, according to Reuters, but the commission said the investigation is still in its early phase, with further work to be carried out over the coming months.
“We received reports from relevant associations and companies that Qualcomm abuses its dominant position in the market and charges discriminatory fees,” said Xu Kunlin, who heads the NDRC’s anti-monopoly and price supervision bureau.
Qualcomm had previously acknowledged that it was under investigation in China, but until now no specific details about the probe had been confirmed by the NDRC.
The NDRC said that it had conducted raids at Qualcomm’s Chinese offices in November, before later meeting with senior executives at the company to discuss the investigation.
Qualcomm confirmed it was under scrutiny by the Chinese authorities last year, and has said it is complying fully with all requests from the NDRC, despite company CEO Paul Jacobs stating earlier this year that the company was unaware as to the reasons why it was being investigated.
Following the NDRC statement, Qualcomm spoeswoman Christine Trimble said the company was continuing to cooperate with the investigation. Under China’s anti-monopoly laws, the NDRC can impose fines of between 1 and 10 percent of a company’s revenues for the previous year. Qualcomm earned $12.3 billion in China for its 2013 fiscal year, amounting to nearly half of its global sales, meaning that an equivalent fine would hit the company hard.
The NDRC also said it was also looking at another US firm, mobile technology company InterDigital. The company has been accused of patent trolling in the past and is under investigation regarding claims that it overcharging on its licensing.
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