Qualcomm Settles Chinese Antitrust Violations With Record $975 Million Fine

Qualcomm managed to negotiate its way out of paying the full amount of what could have been a $1.6 billion fine in China over antitrust violations. Instead, China's National Development and Reform Commission imposed a record fine of $975 million, a figure Qualcomm agreed not to contest even though it's "disappointed" with how the investigation turned out. At the same time, Qualcomm said it's happy to have it done and over with.

As part of the settlement, Qualcomm agreed to a number of terms and conditions mostly related to how it licenses technologies to companies in China. For example, Qualcomm said it will offer licenses to its current 3G and 4G essential Chinese patents separately from licenses to its other patents and will provide patent lists during the negotiation process.


"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 Derek Aberle, president of Qualcomm. "We appreciate the NDRC's acknowledgment of the value and importance of Qualcomm's technology and many contributions to China, and look forward to its future support of our business in China."

China's investigation into Qualcomm's business practices dragged on for more than a year, during which time some handset makers stopped making royalty payments pending the outcome of the investigation. Most of Qualcomm's revenue comes from patent licenses.

Qualcomm updated its financial guidance for its fiscal year ending September 27, 2015. The company now expects revenues to be $26.3 billion to $28 billion, compared to its prior guidance of $26 billion to $28 billion.