CES 2015 China's National Development and Reform Commission (NDRC) claims Qualcomm is overcharging and abusing its market position, something for which the US chip company may be fined $1bn.
At the Qualcomm CES press conference, president Derek Aberle highlighted the dispute as “one of the highest priorities for our management team”.
However, he didn’t have much more to say, commenting that "there has been some speculation around, and we can’t really comment too much on that. As soon as we get to a resolution, obviously we will be in a better position to talk about it".
It’s not just Qualcomm the Chinese authorities are gunning for - Microsoft, Audi, and BMW were also investigated in 2014 by China's antitrust authorities.
China isn't alone in pointing fingers, with Qualcomm said to have taken advantage of its market position in Korea several years ago, where it was fined $20m. And in the EU, the chip giant was forced to renegotiate deals with Nokia.
China, however, is a bigger deal, where sales of Qualcomm chips and IP licensing to handset manufacturers using other companies' chips (principally those from Chinese manufacturer MediaTek) accounted for around half of Qualcomm’s revenue last year.
Yet Qualcomm suspects that not all the royalties it should be earning from Chinese companies are being paid, and this could be Aberle's strong suit. Before becoming president he was head of Qualcomm Technology Licensing, responsible for overseeing the IP business.
At the beginning of 2014 Reuters reported that Qualcomm faced the billion-dollar penalty under the country's antitrust laws, which allow for fines between one and ten per cent of a company's revenues.
China’s NDRC (formerly the State Planning Commission) has broad administrative and planning control of the Chinese economy. ®