Qualcomm to pay $975m after Chinese licensing probe
Semiconductor company Qualcomm has agreed to pay a fine of nearly $1 billion to a Chinese government agency following an anti-competition investigation into the company’s patent licensing programme.
In a statement on Monday (February 9), Qualcomm said it would not contest the $975 million fine and that it was pleased the investigation has concluded.
The news comes after a 14-month investigation carried out by the National Development and Reform Commission (NDRC) into Qualcomm’s licensing of chips to mobile phone handset makers.
The NDRC, which has been investigating the company since November 2013, found that it had violated anti-competition laws with its royalty charges.
In its statement, Qualcomm said it had agreed to implement a “rectification plan” that modifies certain parts of its business practices in China and that “fully satisfies” the requirements of the NDRC’s order.
Under the agreement, Qualcomm said it will offer separate licences to certain patents, with licensees whose phones use 4G technology paying a 3.5% royalty rate, and those whose handsets incorporate 3G paying 5%.
Instead of applying the royalty rate to the wholesale price of the handset, as it did previously, Qualcomm will instead apply it to 65% of the net selling price of a device.
Steve Mollenkopf, chief executive of Qualcomm, said the company had played an important role in the success of the mobile and semiconductor industries in China.
“We are pleased that the resolution has removed the uncertainty surrounding our business in China, and we will now focus our full attention and resources on supporting our customers and partners in China and pursuing the many opportunities ahead,” he added.
