Thomas Cheng on China's Anti-Monopoly Case Against Qualcomm (J Antitrust Enforcement)

"The PRC NDRC Case against Qualcomm: A Misguided Venture or Justified Enforcement of Competition Law?"
Thomas Cheng
Journal of Antitrust Enforcement
Vol. 4, Issue 2, published May 2016

Abstract: The Chinese Anti-Monopoly Law (AML) has attracted much attention in recent years. There have been accusations of protectionism and of the AML being used to target foreign companies. Against this backdrop, the investigation by the National Development and Reform Commission (NDRC) against Qualcomm over the latter’s licensing practices was especially controversial. This was particularly so because China has long complained about the high licensing fees its domestic manufacturers have to pay to foreign patentees. And Qualcomm is a major licensor of communications technologies and earns a very considerable amount of licensing revenue in China. Qualcomm was eventually slapped the largest fine in the history of Chinese AML enforcement and subject to a number of behavioural remedies. The question arises as to whether the NDRC decision was a poorly reasoned protectionist venture or was in fact consistent with sound competition law principles. This article attempts to answer this question by critically evaluating the reasoning of the decision. It finds that even though the NDRC reached the correct conclusion on some of the claims, the analysis and the reasoning leave much to be desired.