According to local reports, Chinese regulator, the National Development and Reform Commission (NDRC) is investigating the operations of Qualcomm’s local subsidiary.
There are allegations that the company is overcharging and exploiting its market position, and the subsidiary could be hit with fine of over $1 billion.
Qualcomm’s CEO, Steven Mollenkopf, is presently in China holding talks after launching a strategic venture fund worth $150 million.
A report published by the regulator suggested that it had not decided whether Qualcomm was abusing its market power, but it has been alleged the company is charging lower royalties for patents to undercut competition with similar technology.
As Qualcomm operates as the sole chipmaker for next-generation phones, the company is able to dictate licensing fees.
Under China’s six-year-old monopoly law, regulators can impose fines of between 1% and 10% of company’s revenues from the previous year.
Qualcomm is reportedly co-operating with the investigation.
