Qualcomm is suspected of overcharging and abusing its dominant market position by Chinese anti-monopoly regulator the National Development and Reform Commission (NDRC), reports Reuters.
The NDRC said it started to look into Qualcomm’s practices after receiving complaints that it was charging higher prices in China than elsewhere. If the allegations are proven, the chipmaker could be hit by fines of more than $1 billion.
Speaking at a press conference, Xu Kunlin, who heads the NDRC’s anti-monopoly and price supervision bureau, said it received reports from associations and companies saying that Qualcomm “abuses its dominant position in the market and charges discriminatory fees”.
Qualcomm revealed in November it was the subject of an anti-trust investigation in China by the country’s National Development and Reform Commission (NDRC). CEO Paul Jacobs subsequently pleaded ignorance of why the chipset maker was put under investigation.
Earlier this month, the China Mobile Communications Industry Association reportedly filed a complaint against Qualcomm for overcharging China’s mobile phone manufacturers on patent fees.
Under anti-monopoly law, the NDRC can fine companies between 1 and 10 per cent of a company’s revenue for the previous year. Qualcomm generated $12.3 billion in revenue in China for the fiscal year ending 29 September.
A settlement is also likely to include commitments from Qualcomm to lower its patent licensing fees for Chinese customers.
A Qualcomm representative told Reuters that the company intends to continue to cooperate fully with the NDRC.
The NDRC also said it is in talks with another US technology company, InterDigital, about a settlement following another anti-monopoly investigation.
InterDigital, which develops patent technologies for wireless devices and networks, apologised for “misunderstanding Chinese laws” in a statement in December.
An NDRC official told Reuters that the company has been “very cooperative” and that the organisation and has “taken some positive steps”.
Foreign firms are facing tougher scrutiny from Chinese authorities looking to protect consumers from inflated prices and poor quality products. The NDRC is focusing its attention on companies that licence patent technology for mobile devices and networks.