News hit the wire that Qualcomm is going to pay the Chinese government a huge $975 million fine to settle an antitrust case and will lower its royalty rates. Qualcomm said it won't challenge the ruling and claims it will end up better-positioned in China as the decision removes the uncertainty.
The Chinese regulators found that Qualcomm's license fees were too high and that Qualcomm abused its dominant position to force customers into accepting its conditions.
China’s National Development and Reform Commission issued a decision that Qualcomm violated its anti-monopoly law, the San Diego-based company said Monday in a statement. Qualcomm won’t challenge the ruling, which includes a fine of 6.088 billion yuan ($975 million) and imposes conditions on royalties charged on phones sold in China.
The accord puts to rest an investigation that lasted more than a year and hurt Qualcomm’s ability to collect licensing revenue in China, where some handset makers have delayed royalty payments or paid less than they owe. Qualcomm, whose chips run most of the world’s phones that can access the Internet, gets the majority of its profit from patent-licensing fees related to its ownership of technology fundamental to cellular-phone systems.
Qualcomm had $31.6 billion of cash and marketable securities at the end of its most recent quarter.