Qualcomm loses its antitrust battle with China, will fork over nearly $1 billion


In its desire to prop up its own state-run companies, such as Semiconductor Manufacturing International Corp. and Spreadtrum Communications, China launched antitrust claims against mobile chipmaker Qualcomm. According to a report by Reuters, the fruits of China’s labor have grown as both parties reached a settlement worth just under $1 billion.

According to the report, China launched an antitrust investigation into Qualcomm, after the country accused the chipmaker of practicing anti-competitive licensing. The investigation, which went on for 14 months, intensified in recent weeks. This led senior executives at Qualcomm and National Development and Reform Commission (NDRC) to hold talks of a possible settlement.

The $975 million settlement could also include Qualcomm issuing a 33 percent discount on its royalty fees, which are used on patents in China. In addition to the lowered royalty fees, which could be announced as soon as Monday, Qualcomm will also change its licensing practices. This stipulation could prove to be the most detrimental to the company’s fortunes, as about half its global revenue of $26.5 billion was from China alone.

Qualcomm’s $975 million fine is the largest paid by any company in China. This is not good news for a company already dealing with rumored trouble with its Snapdragon 810 processor.