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China imposes record anti-trust fine on Qualcomm

Chinese authorities have imposed a record fine of 6.09 billion yuan (994 million U.S. dollars) on mobile chip maker Qualcomm following an anti-trust probe, it was announced Tuesday.

The National Development and Reform Commission (NDRC) said Qualcomm was found to have abused its market dominance, charging discriminatory fees in the Chinese market when licensing mobile chip technology.

"Qualcomm's practices hampered innovation and technology development, harmed consumers' rights and interests, and violated China's anti-monopoly rules," according to an NDRC statement.

The watchdog issued a fine of 8 percent of the company's revenue in the Chinese market for 2013, totaling 6.09 billion yuan, the largest anti-trust fine in China's history.

The NDRC said it started the anti-trust probe in November 2013 and that the fine would stop the company's monopolistic practices, safeguard fair market competition and protect consumers' interests.

It said Qualcomm improperly bundled unrelated licenses with baseband chip sales, forcing Chinese customers to pay for licenses they didn't need.

San Diego-based Qualcomm said in a statement that it would honor the fine and modify its licensing practices.

"Qualcomm will not pursue further legal proceedings contesting the NDRC's findings," it added.

The company was also quoted as saying in the NDRC statement that it would continue to increase investment in China.

It cooperated with the probe and proposed a set of rectification plans, including not conditioning the sale of baseband chips on the chip customer signing a license agreement with terms that the NDRC found to be unreasonable or on the chip customer not challenging unreasonable terms in its license agreement.

The NDRC said it welcomed the company's decision about investing in China and supported the company to charge a reasonable licensing fee for its technology protected by patents.

"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," said Derek Aberle, president of Qualcomm, one of the biggest makers of mobile phone chips.

"We appreciate the NDRC's acknowledgment of the value and importance of Qualcomm's technology and many contributions to China, and look forward to its future support of our business in China," Aberle added.

China has stepped up law enforcement against monopolies in recent years and a number of foreign and domestic companies have been fined for violating the country's anti-trust law.

[Source: Xinhua, Beijing, 10Feb15]

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