Qualcomm fined millions in China for abusing market position

The Chinese government has fined chipmaker Qualcomm in the amount of 860 million euros for abusing its dominant position. The manufacturer would charge competitors too high a license fee for the use of wireless technology.

The National Development and Reform Commission, the competition authority of the Chinese government, has concluded after an investigation that Qualcomm has abused its dominant market position. The group will be fined a total of 6.088 billion yuan, 8 percent of the 2013 turnover in the Chinese market. Converted, the antitrust fine amounts to 860 million euros.

According to the NDR, Qualcomm used excessive license fees for the use of cdma, wcdma and lte technology for which the group has patents. Qualcomm would impose unreasonable conditions on the delivery of its baseband chips, including by requiring customers to purchase multiple licenses, regardless of whether the technology in question was used.

Qualcomm announces that it will not appeal against the fine decision and that it has reached a settlement with the Chinese government. Among other things, the group will disconnect 3G and 4G licenses from those for other patents. In addition, Qualcomm will charge lower royalties to Chinese manufacturers if they do not use cdma or wcdma in products.

In the past, the Korean and Japanese FTC, among others, punished Qualcomm for abusing a dominant market position. The EU closed an investigation into the chip company’s conduct after Ericsson withdrew its complaints.