Qualcomm has agreed to pay a fine to end an
antitrust investigation in China. The settlement, which involves the chip producer handing over 6.09 billion yuan (approximately $975 million) to China's National Development and Reform Commission (NDRC), as well as performing other actions, after the NDRC declared Qualcomm had violated an anti-monopoly law.
Aside from the fees, which
Qualcomm claims it will not be contesting, the manufacturer will be offering licenses to its current 3G and 4G essential Chinese patents separately from licenses for other patents, and will provide patent lists to companies during its negotiation process. In the event it wants to cross-license with another company as part of the offer, Qualcomm must "negotiate with the licensee in good faith and provide fair consideration for such rights."
The royalties for the licenses will be set at 5 percent for 3G devices, including multimode items capable of connecting to both 3G and 4G, with 4G devices including three-mode LTE-TDD devices that do not use CDMA or WCDMA having their royalties set at 3.5 percent. For each, the royalty will be based off 65 percent of the net selling price for the device, rather than the full price.
The rectification plan also includes the requirement that Qualcomm will not sell chips or coerce licensees to agreements with terms deemed unfavorable by the NDRC, though it does not force Qualcomm to sell to non-licensees, and it does not apply to customers that refuse to report their sales of licensed devices. Existing licensees will also be given the chance to switch to the new terms.
"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 Qualcomm president Derek Aberle in a statement.
The NDRC is far from finished with investigating non-Chinese companies. The regulator is still investigating Microsoft, following its
antitrust raid of the company's local offices last summer. China's investigations have come under fire from the US Federal Trade Commission and other opponents, with FTC Chairwoman Edith Ramirez previously expressing concern that the enforcement policy "focused on reducing royalty payments for local implementers as a matter of industrial policy, rather than protecting competition and long-run consumer welfare."