China consults with Korea on Qualcomm probe

Dylan Bushell-Embling
22 Aug 2014
00:00

Chinese antitrust officials have reportedly reached out to their counterparts in South Korea to discuss the case against chipmaker Qualcomm.

The National Development and Reform Commission (NDRC) aims to collaborate with overseas regulators to build a stronger case under Chinese anti-monopoly law, Reuters reported, citing sources.

Korea's antitrust regulator fined Qualcomm over $200 million in 2009 for allegedly abusing its market dominance.

If the NDRC can make its case, Qualcomm faces fines and mandated changes to its licensing agreements that could cost it as much as a tenth of its $25 billion in annual revenue.

Chinese officials' main complaint is that royalty rates on IP that Qualcomm charges in China are comparatively higher than elsewhere in the world, according to Reuters' sources. But this on its own may not be enough to build an anti-trust case without evidence of discriminatory practices.

Pundits have criticized the NDRC's move as putting the cart before the horse.

A decision to reach out to foreign regulators months after announcing the investigation is evidence that the regulator has reached a foregone conclusion, and is now seeking to find evidence to support this conclusion, they claim.

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