14 DAY TRIAL // Mobile silicone producer Qualcomm is most likely to agree to pay a record $1 / €0.88 billion fine to the Chinese government in order to close the case of an ongoing 14-month antitrust dispute.
China has accused the chip maker that its licensing in the country are anti-competitive and now a new report coming from Reuters, which cites a source close to the matter, is saying that the US company has been nearing an agreement with Chinese investigators that amounts to a whopping $1 / €0.88 billion.
But that’s not all, the negotiations might also include Qualcomm agreeing to lower its prices by approximately a third on patents it uses in the country.
Qualcomm is looking to come to a settlement at all cost
Last week Qualcomm officials met with China’s National Development and Reform Commission (NDRC) in an attempt to finally put the dispute to rest.
While the American chip-maker will most likely have to pay a massive fine to put the issue behind, the antitrust investigations might have deeper consequences.
For instance, Chinese officials might persuade, if not even force, Qualcomm to change its core business practices.
In China, when a smartphone maker takes up Qualcomm chips for the purpose of embedding them into their products, the US firm requires them to authorize their patents rights directly to Qualcomm. They are also forbidding to collecting royalties from other Qualcomm clients.
Qualcomm defends itself saying this tactic has been setup in order to prevent infringement lawsuits, but the chip giant’s view is definitely not the whole story. Some argue that forcing firms to abide by these laws is unfair especially when it comes to pricing.
Qualcomm has been trying to breach China
Qualcomm has been deeply invested in securing its Chinese presence by virtue of several strategies. This summer the chip behemoth was said to be looking into taking up a partnership with Semiconductor manufacturing International Corp (a major Chinese chipset maker) in order to produce Snapdragon chips in the country.
The company also wants to invest up to $150 / €134 million in different Chinese start-ups to help it develop mobile technologies for Internet, e-commerce, semiconductors, education and health.