MOSCOW, July 25 (RIA Novosti) - Beijing will soon announce that US chip supplier Qualcomm holds a monopoly in China’s mobile phone chip market, the China Daily newspaper reported Friday, citing an official in the country’s economic planning agency.
According to the publication, Xu Kunlin, director of China’s anti-monopoly bureau of the National Development and Reform Commission, ruled that Qualcomm "has a monopoly," as the investigation of the US chipmaker drew to a close. Xu said the legal declaration of the company’s new status will come soon, but no indication of what possible penalties the California-based technology company might face.
Qualcomm CEO Steve Mollenkopf gave no comment on the matter because the decision has not been officially announced; neither did head of Qualcomm China Wang Xiang.
What Qualcomm did announce was a $150 million investment project aimed at Chinese startups on the same day the anti-trust allegations came in.
Mollenkopf attributed the “new venture investment” to the fact that China “has become a significant portion in handset manufacturing and development,” although investors speculate the move could have been a gesture from Qualcomm to please Beijing.
Earlier on Wednesday, Qualcomm issued an earnings release subtly warning investors that "China continues to present significant opportunities for us, particularly with the rollout of 4G LTE, but also presents significant challenges, as our business practices continue to be the subject of an investigation by the China National Development and Reform Commission."
Under China’s anti-monopoly laws, the government is entitled to 10 percent of a company’s previous-year revenue as a penalty, which is a clear example of the country-specific “challenges” for Qualcomm, which made $12 billion in Chinese sales over the year ending last September. At the same time the market share of the US chipmaker is too large for China to fully give up on at once, which means legal penalties are unlikely to go further than a conventional fine.
