NDRC, SK talk Qualcomm issue

Chinese antitrust officials have met with their South Korean counterparts to discuss violations by US chipmaker Qualcomm Inc, sources said, as Beijing reaches out to regulators overseas to complete a case that could result in record fines at home.

Qualcomm is one of at least 30 foreign firms to come under scrutiny as China seeks to enforce a 2008 anti-monopoly law.

The Korea Fair Trade Commission fined San Diego-based Qualcomm more than US$200 million in 2009 for abusing its dominant market position, but the stakes are bigger in China, where an investigation by the National Development and Reform Commission could spur changes to Qualcomm's licensing deals and fines of as much as a tenth of a company's annual revenue.

Qualcomm had total revenue of almost US$25 billion in the year to September 29, 2013, about half of it in China.

"The Chinese authorities were very interested in how South Korea handled such issues and asked a lot of questions about South Korea's experiences," said a person who was present at meetings in May and June between the KFTC and the NDRC's price supervision and anti-monopoly bureau.

It's unlikely the NDRC could use exactly the same rationale as South Korea against Qualcomm, added the person, who didn't want to be named because of the sensitivity of the case.

"What China takes most exception to is that royalties on intellectual properties are comparatively higher in China. But high price itself shouldn't be an anti-trust matter. It's only a problem when there are elements like discriminatory practices," the person said.

In a statement about the meeting that took place in South Korea, the KFTC said: "China's NDRC, seeking to advance its regulatory enforcement, requested that the Fair Trade Commission share economic analysis techniques used to deal with actual cases."

The NDRC anti-trust bureau said in statements issued after the meetings that the two sides held "thorough exchanges."