China regulator determines Qualcomm has monopoly: state-run newspaper | Reuters EDITION: HOME BUSINESS MARKETS WORLD U.S. POLITICS SIGN IN TECH OPINION BREAKINGVIEWS MONEY Hotel Kapok Beijing BY PAUL CARSTEN AND MICHAEL MARTINA BEIJING Thu Jul 24, 2014 5:51am EDT 25 11 Share this VIDEO This family-friendly hotel is located in Beijing (Dongcheng - Wangfuji... China regulator determines Qualcomm has monopoly: state-run newspaper Tweet PICTURES Sub Prime Hotel Beijing Wangfujing $ 111 0 COMMENTS Search News & Quotes REGISTER LIFE Page 1 of 4 1 Email Print 1 Crunch time for Gaza truce talks as death toll passes 800| 2 Bad weather seen as probable cause of Air Algerie crash 3 First Ebola victim in Sierra Leone capital on the run 4 World's oldest joke traced back to 1900 BC 5 'Weird Al' Yankovic still trying to wrap head around No. 1 album Visitors walk past the Qualcomm stand at the Mobile World Congress in Barcelona, February 24, 2014. CREDIT: REUTERS/ALBERT GEA/FILES Track China's Leaders RELATED TOPICS (Reuters) - China's antitrust regulator has confirmed that Tech » Qualcomm Inc, one of the world's biggest mobile chipmakers, has China » a monopoly, the state-run Securities Times newspaper reported on Thursday, as Qualcomm's chief executive held talks in China. The regulator, the National Development and Reform Commission (NDRC), is investigating Qualcomm's local subsidiary after it said in February the U.S. chipmaker was suspected of overcharging and abusing its market position in wireless communication standards, allegations which could see it hit with record fines of more than $1 billion. The Securities Times report, based on unidentified sources it said were close to the NDRC, did not say whether the regulator had determined that Qualcomm had abused its monopoly. Angela Zhang, an antitrust expert at King's College London, said the report was a "loose Follow Reuters expression that the NDRC has gathered facts that Qualcomm has abused its dominant position." Facebook Twitter RSS YouTube "It seems likely that the decision will be announced soon," she said, noting that having a monopoly alone is not a violation of China's anti-monopoly law. RECOMMENDED VIDEO Qualcomm CEO Steven Mollenkopf, who launched a $150 million "strategic venture fund" in China on Thursday, declined to take questions from reporters. A spokeswoman travelling http://www.reuters.com/article/2014/07/24/us-qualcomm-china-idUSKBN0FT0AU201407... 7/25/2014 China regulator determines Qualcomm has monopoly: state-run newspaper | Reuters Page 2 of 4 with Mollenkopf also declined to comment on the newspaper report. The NDRC declined to provide immediate comment. China is a key market for Qualcomm, accounting for nearly half of its revenue. The country Dad beats son's alleged abuser Mysterious Russian crater discovered Drone video shows final voyage of Concordia Christians given ultimatum by Islamic St… is the world's biggest market for smartphones and is preparing to roll out faster 4G mobile networks this year. While most of Qualcomm's revenue comes from selling chips that enable phones to communicate with carrier networks, most of its profit comes from licensing patents for its widespread CDMA cellphone technology. The Securities Times report said the NDRC was probing Qualcomm's local sales data and that Qualcomm's Aberle has been communicating with the NDRC over issues relating to the anti-monopoly investigation. Analysts say that the process of confirming sales data is FINANCIAL COMMENTARIES AND GUIDES ■ LEAKED: Apple's Next Smart Device(Motley Fool) common in the late stage of an anti-trust investigation, and that the NDRC is likely calculating the extent of fines. Qualcomm President David Aberle, speaking as the company reported a lower-thanexpected outlook for the September quarter on Wednesday, said "some loss would be ■ The American dream of homeownership is within your reach(Personal Capital) ■ Reliability in a world of Risk(Bank of America) probable" from the probe. "We are really not in a position to be able to estimate what that might look like, we just believe whatever the resolution may be, will likely include some form of payment," he added. ■ Your 401(k), made much clearer with this web app (PC Magazine) ■ An Overlooked Way to Pay Off Mortgage(One Smart Penny) Content from sponsors Aberle said the investigation concerns Qualcomm's licensing business as well as interactions Ads by Adblade between its licensing business and its chipset business, and that the probe was making it harder to negotiate new 4G licenses with manufacturers in China. Who knew these 20 male mega stars were so small? Qualcomm was also struggling to collect licensing revenue from some device makers in China, including a growing number of local manufacturers it has done little or no business with in the past, Aberle added. Washington: If your car is used less than 25 miles a day, read this. Some Chinese customers of San Diego-based Qualcomm, such as electronics giant TCL Corp, complain the firm is using its dominant market position to charge high patent fees on its chipsets. New currency law went into effect July 1st, 2014. [Devastating] Industry experts, however, say the NDRC, which is also the government's main economic planning body, is trying to lower domestic costs as China rolls out the 4G mobile networks. TECHNOLOGY AND PATENTS Jingshan Garden Hotel The Securities Times said Qualcomm was charging lower royalties for patents to undercut competitors who have similar technology and maintain market share. The report also said $ 107 that Qualcomm, as the only provider of chips for high-end phones, can dictate those fees. During the launch of the China fund, Qualcomm CEO Mollenkopf defended the company's Hotel Kapok Beijing licensing programme, saying the $30 billion spent in research and development over the company's lifetime had allowed it to spread its technology in China. $ 101 "It's really why anybody that signs up on a license, actually does it voluntarily – because it is a way of leveraging all of that R and D," Mollenkopf said. Under China's six-year-old anti-monopoly law, the NDRC can impose fines of between 1 and 10 percent of a company's revenues for the previous year. Qualcomm earned $12.3 billion in China for its fiscal year ended September 29, or nearly half of its global sales. Qualcomm has previously said it is cooperating with the investigation. http://www.reuters.com/article/2014/07/24/us-qualcomm-china-idUSKBN0FT0AU201407... 7/25/2014 China regulator determines Qualcomm has monopoly: state-run newspaper | Reuters Page 3 of 4 (Additional reporting by Megha Rajagopalan and Beijing Newsroom; Editing by Miral Fahmy) FILED UNDER: TECH CHINA Recommend 41 people recommend this. Sign Up to see what your friends recommend. Tweet this Link this Share this Digg this Email Print Reprints More From Reuters Sponsored Financial Content • Sanctions finally find Russia’s Achilles heel | 23 Jul • LEAKED: Apple's Next Smart Device Motley • Philadelphia mosque leaders try to cut off man's hand -police | 18 Jul • Stop wasting money on rent. Learn whether (?) Fool now is the time to buy. 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