China May Fine Qualcomm $1.6 Billion, Securities Times Says

Chinese regulators may fine Qualcomm Inc. more than 10 billion yuan ($1.6 billion) following an investigation into alleged antitrust violations, the state-run Securities Times reported.

Qualcomm will likely be punished in the next few days, the newspaper said, citing people it didn’t identify. The Securities Times also cited Xu Kunlin, head of the National Development and Reform Commission’s anti-monopoly division, as saying that the penalty may be several times bigger than all similar fines the agency imposed last year.

Qualcomm, the largest maker of smartphone chips, has been under an NDRC probe since November 2013. A fine of that size would mark a record as China investigates the practices of foreign companies including technology and automobile firms.

Hou Mingjuan, a spokeswoman for Qualcomm in China, couldn’t immediately be reached by phone and didn’t respond to an e-mailed request for comment. The NDRC didn’t respond to a faxed request for comment.

Qualcomm is likely to pay China around $1 billion, after the U.S. chipmaker and the regulator made significant progress during talks last week, Reuters reported Monday, citing a source familiar with the matter. Qualcomm may also lower its royalty rates by about a third on patents used in China, Reuters said.

The company said in November last year that 2015 sales and profits will be hurt by the fallout from the Chinese government probe. Citing people familiar with the matter, Bloomberg News reported in December that China wants Qualcomm to accept lower royalty payments for technology used by domestic smartphone manufacturers. Qualcomm was pushing back against China’s attempt to amend its business model out of concern it could lead to changes in other countries, the people said.