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Industry Association Submits Qualcomm Monopoly Report to NDRC

Economic Information Daily, 2/10/14

The Mobile China Alliance (MCA) of the China Communications Industry Association (CCIA) has submitted a report to China's National Development and Reform Commission (NDRC) detailing negative influences on China's handset industry resulting from business practices employed by US-based chipmaker Qualcomm. Wang Yanhui, Chairman of the MCA, stated that his organization has found evidence that Qualcomm is collecting excessive patent and bundled sales fees. According to Wang, the evidence was uncovered over more than a month through visiting more than 20 member enterprises after the NDRC initiated an antitrust investigation into Qualcomm at the end of 2013.

The MCA is composed of more than 30 enterprises, including Chinese handset manufacturers ZTE (0763.HK; 000063.SZ) and Coolpad (2369.HK), as well as chip manufacturers Spreadtrum Communications and RDA Microelectronics (Nasdaq: RDA).

The NDRC already holds evidence of monopolistic behavior by Qualcomm, say organization members. According to an industry source, the materials submitted by the MCA could also become important evidence as part of the final outcome of the antitrust investigation.

Editor's Note: The increasing pressure on Qualcomm for alleged monopolistic practices in China comes as China works to improve its competitiveness in the handset chip space through the possible listing of a merged RDA and Spreadtrum. For more background on this topic, please see: Tsinghua Unigroup May Merge Spreadtrum, RDA for China Listing, MD 11/27/13 issue; "NDRC Claims to Have Evidence of Qualcomm Price-fixing" MD 12/12/13 issue "Qualcomm Faces Anti-Monopoly Investigation in China" MD 11/25/13 issue

Keywords: regulation antitrust chipmaker wireless Qualcomm NDRC Wang Yanhui handset chip

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