China has declared Qualcomm a monopoly in China and may be about to declare that Qualcomm has abused that monopoly. If it does, Qualcomm could be fined up to $1.2 billion.
Qualcomm is complaining that it’s Chinese licensees are under-stating sales so as to reduce royalties, while other Chinese companies are delaying signing licences until the abuse of monopoly legal process is concluded.
China has a big interest in promoting the local consolidated mobile phone company Unigroup-RDA-Spreadtrum. High licensing fees would make it uncompetitive.
The danger for Qualcomm is that the China government will not acknowledge the validity of the system under which Qualcomm operates and that Qualcomm will find its IP unprotectable in China.
Qualcomm can’t walk away from China without incurring a big penalty – half of its $25 billion revenues came from China last year,