Qualcomm Deemed to have Monopoly in China

US chipmaker Qualcomm has reported a 42% increase in its third quarter profit from a year ago, due in part to increasing demand for smartphones in China that depend on its semiconductor technology.

At the same time, the group has reported problems in collecting licensing revenues from some device manufacturers in China and also faces an investigation by the country’s antitrust regulator, which has charged it with having a monopoly.

State-run newspaper the
Securities Times
confirmed that the National Development and Reform Commission (NDRC), is investigating Qualcomm’s local subsidiary Aberle and its local sales data after it said in February that the US chipmaker was suspected of overcharging and abusing its market position in wireless communication standards.

Analysts say that the process of confirming sales data is common in the late stage of an anti-trust investigation, and that the NDRC is likely calculating the extent of fines to be levied against the group.

China’s six-year-old anti-monopoly law permits the NDRC to impose fines of between 1% and 10% of a company’s revenues for the previous year for any violations. Qualcomm earned US$12.3bn in China for its fiscal year ended 29 September, representing close to half of its total sales worldwide.

Commenting on the investigation, Qualcomm said it believes “a loss is probable but that any possible range of loss cannot be reasonably estimated at this time.” It added that it continues to cooperate with the NDRC.

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