Probes 'not targeting' foreign firms: Official

By Zheng Yangpeng ( China Daily ) Updated: 2014-02-20 05:20:11

An official of China's antitrust regulator on Wednesday denied there is any implicit agenda behind its investigations of foreign companies, while confirming that two foreign telecommunications companies are being probed.

The comment was made in response to claims the agency's scrutiny of IT providers stems from its desire to lower domestic costs as China rolls out its fourth-generation mobile networks.

Probes 'not targeting' foreign firms: Official

Qualcomm probed

"People like to speculate about whether there is any ‘background' to the probe. In fact, there is no ‘background' behind any of the cases we have investigated," Xu Kunlin, director of the bureau of price supervision and antimonopoly, told a news conference in Beijing.

The bureau is a division of the National Development and Reform Commission, the top economic planner.

Xu confirmed the bureau is conducting an investigation into Qualcomm Inc and InterDigital Inc, both from the United States.

"The two cases stemmed from complaints and have nothing to do with 3G or 4G standards," he said.

Qualcomm, based in California, and InterDigital, in Delaware, have previously disclosed they were under investigation, but Xu's comments were the first by the Chinese government.

The NDRC started an inquiry against Qualcomm last November, saying the company had violated China's antimonopoly law.

Xu said Qualcomm is suspected of abusing its intellectual property rights and charging discriminatory patent licensing fees to Chinese mobile device manufacturers and network operators.

"In terms of abusing intellectual property rights, we have exchanged views with many law enforcement agencies in foreign countries and received great inspiration. They call this kind of firm ‘patent rogue companies'," Xu said.

Qualcomm's business in China falls into two parts — mobile phone chipset production and patent licensing. Most mobile phone companies such as Lenovo Group Co Ltd, as well as manufacturers Huawei Technologies Co Ltd and ZTE Corp, are Qualcomm's major clients.

Qualcomm reported $12.3 billion in revenue from China in the 12 months that ended on Sept 30 — 49 percent of its total revenue.

"Thanks to its strong technology advantages and patent pool, Qualcomm has a dominant and incomparable position in the Chinese telecom and mobile phone industries," said Xiang Ligang, a Beijing-based telecom expert.

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