Chinese antitrust regulator claims to have substantial evidence against Qualcomm

Summary:China's top antitrust regulator will add more manpower in 2014 as the country is set to redouble its efforts to battle price fixing, state media reported last week.

The National Development and Reform Commission (NDRC), China's top economic planning body, has obtained "substantial evidence against" Qualcomm — a leading US chipmaker — in a price-fixing accusation, Xu Kunlin, head of the NDRC's anti-price-fixing bureau, told official English newspaper China Daily on December 12.

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Xu didn't elaborate further on the evidence against Qualcomm in the China Daily report. It is the agency's first public response on the case.

In late November, Qualcomm said that China's NDRC had commenced an investigation of the company, relating to the anti-monopoly law in China. Denying that the company is aware of any charge by NDRC under the law, Qualcomm said in the statement that it will continue to cooperate with the NDRC as it conducts its confidential investigation.

In an email reply to Reuters, Qualcomm said that it believes its business practices to be "lawful and pro-competitive". The company is also "looking forward to a first meeting with the agency", according to a spokesperson with Qualcomm.

Xu, the official with China's top anti-trust regulator, told China Daily that its antitrust probes focus on six industries, including aerospace, daily chemicals, automobile, telecommunications, pharmaceuticals, and home appliances. Besides Qualcomm, the agency is also probing an alleged vertical monopoly in the supply chain of imported cars.

The NDRC has enhanced its anti-monopoly enforcement during the past several months. The agency slashed record fines to six milk powder companies, including Mead Johnson Nutrition and Danone, and punished several domestic jewellers that were found to be manipulating the prices together, Reuters revealed.

Xu also said that his Beijing department and local price supervision offices will recruit at least 170 new employees for the antitrust law enforcement team. The Beijing office currently has 46 employees, and 20 of the 170 new hires will join the office later.

Headcount expansion will ensure scrutiny of business practices that "may lead to unreasonably high prices for consumers and those industries that harm the consumers the most", Xu said in the report. It also reflects China's determination in coping with price fixing, as the central government these days has vowed to limit the number of government employees.

Topics: Legal, China

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Cyrus Lee, writing under a pen name, is a Hong Kong-based reporter in an English-language newspaper and a correspondent for a radio station.

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