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Qualcomm pleads innocence as Chinese regulators turn the screw

Fines could exceed $1 BEEEEELLION, says local media

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Mobile CPU giant Qualcomm has released a lengthy statement denying any wrong-doing after Chinese media claimed regulators have “substantial evidence” in an anti-monopoly investigation which could lead to over $US1bn in fines for the firm.

Qualcomm revealed at the end of November that China’s National Development and Reform Commission (NDRC) had begun an investigation related to the country’s Anti-Monopoly Law (AML).

In a new statement sent to The Reg today, the chip maker had the following:

We are and will continue cooperating fully with the National Development and Reform Commission (NDRC), and look forward to having our first meeting with NDRC soon. We believe our business practices are lawful and pro-competitive. Since first introducing our technology and products in China well over a decade ago, Qualcomm has been dedicated to helping grow China's wireless industry by investing significantly in research and development, licensing our advanced technologies and providing the most advanced chipsets to our Chinese partners.

Qualcomm continued by arguing that thanks to its chips Chinese companies have grown to become “among the top manufacturers in the mobile industry”.

However, things don’t look brilliant for the San Diego-headquartered firm.

Beijing rarely orders a probe of this kind if it isn’t prepared to make an example of the company it’s investigating.

Most recently the NDRC “uncovered” anti-monopoly practices by foreign players in the milk powder industry and in pharmaceuticals, where Britain’s GlaxoSmithKline has already admitted some execs breached local laws.

To make matters worse for Qualcomm, state-run China Daily last week quoted NDRC department head, Xu Kunlin, as saying it already had “substantial evidence against” the US firm.

Meanwhile, the Beijing Times is claiming Qualcomm could face anti-trust fines of $1.2bn if found guilty, according to WantChinaTimes.

Former CEO Paul Jacobs told the Wall Street Journal late last month that Qualcomm is “seeing increased pressure” in China thanks to US restrictions on Chinese firms and revelations about NSA snooping.

However, the firm is still hoping to grow its $1bn business in the Middle Kingdom next year. ®

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