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Qualcomm reprimanded in China for market abuses and faces $1b fine

China wants to fine Qualcomm up to $1 billion [£600 million] after claims it abused its market position and overcharged for its products in the country’s burgeoning smartphone market.

Related: Qualcomm restructures to preserve patent portfolio

The National Development and Reform Commission [NDRC], which encompasses China’s anti-monopoly regulator, is also in talks with InterDigital Inc in a separate probe as it attempts to protect its consumers from over-exorbitant prices and second rate products.

"We received reports from relevant associations and companies that Qualcomm abuses its dominant position in the market and charges discriminatory fees," Xu Kunlin, heads of the NDRC's anti-monopoly and price supervision bureau, according to Reuters.

Qualcomm stands accused of overcharging for the use of one of its patents and if the company is found guilty the fine will be between one and 10 per cent of the firm’s revenues for the previous year – which stood at $12.3 billion [£7.3 billion] in China.

Observers added that Qualcomm will be forced to charge lower patent licensing fees in future and it is all linked to the Chinese government attempting to lower domestic costs before its 4G mobile networks come into effect later on this year.

For its part Qualcomm has so far stated that it is cooperating with the government on what it understood was a confidential case.

"We haven't seen the transcript of today's press conference but we intend to continue cooperating fully with the NDRC," a Qualcomm spokesperson said. "The NDRC has advised us the investigation is confidential."

The NDRC first carried out raids on Qualcomm’s HQ in Beijing and offices in Shanghai back in November and then met with William Bold, senior VP for government affairs, and Fabian Gonell, VP and counsel for technology licensing, both from Qualcomm, in December.

Related: Nokia, Samsung, Qualcomm hold most LTE patents claim study

InterDigital, which develops patent technologies for wireless devices and networks, the other company that stands accused in a similar case, has reportedly been “very cooperative”, according to Lu, and has already “taken some positive steps.”