Mobile chip maker, Qualcomm, is set to pay $975 million out to Chinese officials in order to end a 14 month-long anti-trust investigation into the company’s patent licensing practices. The fine is actually the largest in China’s corporate history.
The firm will also have to lower royalty fees on patents used in the Chinese smartphone market. This move should help out Chinese device makers, Huawei and Xiaomi in the long run. Qualcomm has no plans to contest the ruling.
In a statement made yesterday, the company said: “Although Qualcomm is disappointed with the results of the investigation, it is pleased that the NDRC (National Development and Reform Commission) has reviewed and approved the company’s rectification plan”.
Qualcomm is the biggest supplier of smartphone chips and will now charge royalties based on 65 per cent of the selling price of smartphones in China, rather than the entire price.
The company managed to make half of its global revenue in China last year. News of this settlement agreement sent shares up by 2.8 per cent during after hours stock trading.
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KitGuru Says: This should be good news for other Chinese smartphone makers, such as Huawei or Xiaomi.