High fine for Qualcomm promotes fair competition

The 6.088-billion yuan ($975 million) fine imposed by the National Development and Reform Commission on chipmaker Qualcomm Technologies Inc for violating the anti-monopoly law is the highest on any company on the Chinese mainland. But it is equal to only 8 percent of what the US-based company earned from sales on the mainland in 2013 and less than the 10 percent of its sales revenue that it could have been asked to pay.

There is no need to misinterpret the fine as anything but a justifiable penalty for undermining fair competition. In the past two years, the authorities have levied 3 billion yuan in fines on domestic and overseas-funded businesses for violating monopoly laws.

Especially noticeable is the agreement by Qualcomm to pay the fine: it will offer licenses for its current 3G and 4G mainland patents to other companies, and the royalties it collects will be calculated on 65 percent of the selling price of the phones instead of the full price.