China launches antitrust probe into Qualcomm

Chinese regulators have launched an antitrust probe into Qualcomm as the country gears up for the launch of high-speed LTE networks, a market where the US company has become an early leader and owns important patents.

Qualcomm disclosed the investigation, by China’s National Development and Reform Commission, on Monday. It said the probe involved the country’s Anti-Monopoly Law, though it was “not aware of any charge” by the regulators that it had broken the law.

The disclosure, which wiped nearly 2 per cent from Qualcomm’s shares in early trading, came as the Chinese authorities laid out more assertive plans for antitrust enforcement. State media reported on Monday that the NDRC will broaden price-related antitrust investigations launched earlier this year to include six new industries – aerospace, medicine, cars, household chemicals, telecommunications and household appliances. It was not clear if the Qualcomm case was part of this widening.

China has become Qualcomm’s biggest market, accounting for 49 per cent of sales in its latest fiscal year, thanks to the number of manufacturers based there which build its chipsets into their products. China has also become an increasingly important end-market as the US company moves deeper into the lower-priced chips used in feature phones and smartphones sold there.

Qualcomm’s control of intellectual property central to widely used wireless standards has drawn antitrust complaints in the past, though it was unclear if the latest investigation was prompted by similar concerns. European regulators spent four years looking into charges from manufacturers based in the EU that Qualcomm had refused to license its patents for use in 3G networks on reasonable terms. The case was dropped in 2009 after the companies had resolved their disputes with Qualcomm and dropped their complaints.

“They are the [market] share leader in wireless IP [intellectual property],” said Patrick Moorhead, an independent chip industry analyst in the US. Such control of key technology often leads to charges of abuse, he added. “You can be a monopoly, but you can’t use that to block competition.”

The US company has less dominance in the latest generation of 4G networks such as LTE, though it is still among the leading patent holders in the technology. Paul Jacobs, Qualcomm’s chief executive, forecast earlier this month that his company’s fortunes were likely to be boosted in the second half of next year by the rollout of LTE in China, though licences for carriers to use the technology have yet to be issued.

In the Chinese bureaucracy, the NDRC, the powerful central planning agency, only has the power to investigate monopolistic behaviour related to price-fixing and price manipulation. The agency has launched more than 50 price-related probes into domestic and foreign companies since China’s anti-monopoly law came into effect in 2008 and publicly issued fines and penalties in at least 20 of these cases.

Earlier this year, the NDRC fined six liquid-crystal display manufacturers (two Korean companies and four Taiwanese companies) a total of about $57m for participating in an alleged price-fixing cartel agreement.

The agency has also launched an industry-wide investigation into the pricing of medicine and in August it levied its biggest ever penalties for pricing violations, fining six international infant milk formula companies a combined $110m.
 
 
By Richard Waters in San Francisco and Jamil Anderlini in Beijing / THE FINANCIAL TIMES

歷史上的今天

About mtlin

I'm easygoing and sometimes sentimental, also can be very funny. Geek style but social. A Blogger, a Wikipedian and an Engineer.
This entry was posted in Technology and tagged , , , , , , , , . Bookmark the permalink.

Leave a Reply

Your email address will not be published.