Qualcomm seems to be in trouble as Chinese regulators have launched an anti-trust probe seeking leverage in royalty negotiation, the U.S. firm confirmed on Monday.
Qualcomm said that the investigation will involve China’s anti-monopoly law and the regulators have confirmed that the “substance of the investigation is confidential”.
The firm said it was completely unaware of any antitrust violations and also about the charges the Chinese regulators have imposed on it, but assured complete cooperation with the probe by China’s National Development and Reform Commission (NDRC), the body which is probing Qualcomm.
According to the chipmaker, the NDRC did not say why the company was being investigated. But on Sunday China’s state media spotted an NDRC official saying that regulators would focus antitrust investigations on six industries coming from technology and medicine industries.
China has in recent times increased scrutiny of businesses involved in price fixing and charging higher prices from consumers.
In August, six foreign producers of baby milk formula were imposed a fine of 670m yuan (£71m; $109m) by the Chinese regulators for price-fixing. Also in February, the NDRC fined six Korean and Taiwanese liquid crystal display makers about $57 million for price fixing.
The Qualcomm investigation comes at a time when China is getting ready for 4G Long Term Evolution (LTE) Networks launch. The country has plans of launching commercial 4G mobile communications services on 18 December.
China Mobile, world’s leading mobile operator company with over 700 million users, will be the first to offer 4G services to its subscribers, followed by China Unicom and China Telecom, the two other major Chinese carriers.
Some analysts are of the view that Chinese regulator’s probe into Qualcomm, one of the key players in the segment, is an attempt to help domestic players in China.