Qualcomm could get fines exceeding $1bn as China looks to settle antitrust probe

The Chinese government has said it is seeking to settle its antitrust investigation against US-based chipmaker Qualcomm immediately, and the company is likely to be fined heavily in the case.

Reuters reported that China's anti-monopoly regulator National Development and Reform Commission (NDRC) said in a statement that the case will be settled according to the law. The NDRC had announced a probe into the company some 13 months ago.

The notice, citing Xu Kunlin director general of NDRC's anti-monopoly bureau, said the NDRC had completed its seventh round of discussions with Qualcomm CEO Derek Aberle and his team earlier in December.

The NDRC had accused the US chipmaker of having a clear monopoly in the world's second largest economy. The company was suspected of overcharging and abusing its market position in wireless communication standards.

Under China's anti-monopoly law, the NDRC can impose fines of between 1% and 10% of a company's revenues for the preceding year.

Qualcomm, among the world's biggest makers of cellphone chips, could have to cough up more than $1bn (£587m, €743m) in fines. It raked in $12.3bn in China for its financial year ended 29 September, 2013, or about half of its global sales.

Qualcomm President Derek Aberle has been in touch with the NDRC over issues relating to the anti-monopoly probe.

Qualcomm had expected additional royalty revenue in the wake of Chinese telecom firms, including the nation's largest cellphone carrier China Mobile, upgrading to high-speed networks in 2014 using Qualcomm technology.

Analysts have said China's antitrust investigation could be an attempt to influence royalty negotiations with Qualcomm, ahead of the expected rollout of 4G wireless infrastructure by China Mobile.

Shipments of 4G-enabled smartphones, many of which will use Qualcomm technology, are expected to jump some 30% to exceed half a billion units in Greater China in 2015, according to analyst data, as against the 385 million units shipped in 2013.

The American Chamber of Commerce in China earlier criticised China's antitrust probes into foreign companies, after its survey found foreign firms in China feel they are unfairly targeted in the country.

Meanwhile, the anti-monopoly bureau at the NDRC said the agency is not partial and both domestic and foreign companies are treated equally.