BEIJING, Jan 5: Qualcomm, the world’s biggest cellphone chip maker, may face a record fine of over USD 1 billion in China for overcharging and abusing its market position in wireless communication standards.
The final decision may include a record fine and changes as to how Qualcomm licenses its technology to handset makers in China.
China’s National Development and Reform Commission (NDRC) has said it suspects US firm Qualcomm of overcharging and abusing its market position in wireless communication standards.
The company is likely to face fines exceeding USD 1 billion, industry experts were quoted as saying by China Daily.
Qualcomm is the top patent holder for cellphone technology, including many that form industry standards like CDMA and LTE.
Charging royalties based on the cellphones’ selling prices, even those made with competitors’ chips, provided more than half of its USD 8 billion net income last year.
China contributed approximately half of Qualcomm’s total revenue in fiscal 2014.
The Chinese investigation is one of several Qualcomm has faced. The company was hit with a USD 20-million fine in South Korea in 2009 and was forced to renegotiate licensing agreements with Nokia and others by the European Commission in 2007.
Qualcomm is one multinationals firms along with Microsoft and top Auto companies which in recent times faced investigations into anti-trust laws.
The government denied allegations of targeting multinational firms to provide advantage to the Chinese companies. (PTI)
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