Qualcomm pays US$975m to settle China antitrust probe

[SAN FRANCISCO] US mobile chip titan Qualcomm on Monday said it will pay nearly a billion dollars as part of a deal to end a long-running antitrust probe in China.

Under terms of an agreement with China's National Development and Reform Commission, Qualcomm will modify its business practices in that country and pay 6.088 billion yuan (about S$1.32 million), the California based chip maker announced.

The agreement will end the commission's investigation into Qualcomm under the auspices of China's Anti-Monopoly Law, according to the company.

"We are pleased that the investigation has concluded and believe that our licensing business is now well positioned to fully participate in China's rapidly accelerating adoption of our 3G/4G technology," Qualcomm president Derek Aberle said in a release.

Qualcomm said that as part of the settlement it modified the terms under which it licenses its mobile chip technology in China.

Beijing confirmed early last year that a probe of Qualcomm was under way.

The NDRC, one of China's three anti-trust watchdogs, said the investigation was triggered by complaints by unnamed Chinese industry players had triggered that US companies were abusing their market dominance to charge high prices.

Chinese authorities about two years ago launched sweeping investigations into alleged malpractice by foreign firms in various sectors including pharmaceuticals and baby formula.

Qualcomm shares ended the trading day up slightly and then rose more than a percent to US$68.10 in after-market activity.

Qualcomm chief executive Steve Mollenkopf said the deal "has removed the uncertainty surrounding our business in China, and we will now focus our full attention and resources on supporting our customers and partners in China and pursuing the many opportunities ahead."

Qualcomm, whose chips are used in a large number of mobile phones and devices, agreed to charge royalties of five per cent for 3G devices and 3.5 percent for 4G devices, and will not condition the sale of chips on "unreasonable" terms, according to the agreement.



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