Qualcomm to Pay Massive Fine

This has been building for a long time but it appears that Qualcomm ($QCOM) is about to pay the government of China of a massive fine for “anti-competitive practices.”

There’s not much Qualcomm can do except pay the fine. The stock may rally simply on the news that this matter may finally be resolved. Reuters reports:

Qualcomm Inc is likely to pay China a record fine of around $1 billion, ending a 14-month government investigation into anti-competitive practices, after the U.S. chipmaker and the regulator made significant progress during talks last week.

The deal, which may also see Qualcomm lower its royalty rates by around a third on patents used in China, could be announced as soon as Monday, a source said.

Discussions in Beijing over one of the most contentious cases under China’s 2008 anti-monopoly law have intensified in recent weeks, culminating in meetings between Qualcomm senior executives and National Development and Reform Commission (NDRC) officials on Friday.

Qualcomm’s fine would be the largest paid by any company in China. The company would also agree to make changes to its licensing practices, though those are not expected to alter its business model.

Posted by on February 9th, 2015 at 9:08 am


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