|
 The San Diego-based company has been under investigation since
November by the National Development and Reform Commission (NDRC),
one of China's three antitrust regulators, over how the company
licenses its patents and prices its chipsets.
Qualcomm is among an array of foreign firms that have been
scrutinized by the government as China intensifies efforts to bring
companies into compliance with its 2008 anti-monopoly law. At stake
are financial penalties equivalent to as much as 10 percent of a
company's annual revenue.
As part of the NDRC probe, Qualcomm hired Global Economics Group to
produce an economic analysis for submission to the regulator,
Christine Trimble, a spokeswoman at the chipset maker, told Reuters
on Thursday.
She said the Chicago-based consultancy employed Zhang Xinzhu, a
member of the Chinese Academy of Social Sciences (CASS) and one of
China's leading antitrust experts, to co-write the report.
Zhang was dismissed from the State Council's expert commission on
competition issues for taking "huge rewards" from Qualcomm, the
official Xinhua News Agency reported on Wednesday.
"Qualcomm paid Global Economics its standard rates for the firm's
services," Trimble said, and did not have "any financial dealings"
with Zhang directly.
David Evans, chairman of Global Economics Group, declined to
comment.
The Qualcomm analysis was submitted to the NDRC in May and had three
principal authors, including Zhang. Earlier, the 40-year-old
professor also provided expert analysis for several domestic
conglomerates including China Mobile, China Telecom and China
Unionpay, as well as foreign firms involved in antitrust
investigations such as Yum! Brands Inc.
"Hiring economists to provide such economic analysis to antitrust
authorities is routine practice in government investigations in
China and around the world," Trimble said.
The NDRC said in February that the chipmaker was suspected of
overcharging and abusing its market position in wireless
communication standards, allegations which could see it hit with
record fines of more than $1 billion.
Under the six-year-old anti-monopoly law, the NDRC can impose fines
of between 1 and 10 percent of a company's revenues for the previous
year.
ONLY SILENCE
Zhang had "contravened work discipline" and been removed from his
position on the anti-monopoly committee, reported Xinhua.
The news agency said "certain multinational companies" had been
attempting to delay antitrust probes, including spending money to
gain support on experts groups and complaining of being picked on
for being foreign.
"Against this backdrop, hiring relevant 'experts' from government
departments to 'speak on behalf of foreign companies' is a violation
of discipline ... This matter should be gotten to the bottom of and
bought to light," Xinhua said.
In a short, emailed response to questions from Reuters, Zhang wrote
on Wednesday: "(My) individual strength is too insignificant, and
the machine of state too powerful. There can only be silence."
The 21-member anti-monopoly academic experts group from which Zhang
was dismissed was established in 2011. The group is seen to serve
the principal role of providing the bureaucracy with the supporting
arguments needed to justify its industrial policy aims, a source in
the U.S. business community familiar with the Qualcomm case told
Reuters.
[to top of second column] |
Zhang also has been critical of the NDRC in numerous articles
published in Chinese media in recent years, which may have put him
at odds with individuals at the regulator, said a Beijing-based
industry person who is familiar with the workings of the advisory
group.
Zhang argued that at times the regulator had acted outside of its
jurisdiction and misused antitrust principles.
"Any enforcement should be based on the law and facts and not rely
on public sentiment for judgment," Zhang wrote in a 2012 commentary
published on the Ministry of Industry and Information Technology
news website.
EU CONCERN
The latest development comes amid a local newspaper report that
China would fine German premium auto brand Audi around 250 million
yuan ($40.63 million) for violating anti-monopoly laws.
That followed a statement from Audi late on Wednesday that said it
would accept a penalty and change management processes at one of its
China units after a regional authority said it had found violations
of antitrust laws.
The European Union Chamber of Commerce in China on Wednesday
expressed its concern over the series of antitrust investigations,
saying China was using strong-arm tactics and appeared to be
unfairly targeting foreign firms.
The auto sector has been under particular scrutiny, and the NDRC,
China's state economic planner, has been investigating it amid
accusations by state media that global car makers are overcharging
consumers.
European car brands including Volkswagen AG's Audi, BMW and
Mercedes-Benz are scrambling to lower prices for new cars and spare
parts in an effort to appease Chinese regulators who have accused
some of them of anti-competitive behavior.
Chinese authorities say the law is applied to both domestic and
foreign firms, with the aim of protecting consumers. The NDRC has
said it has targeted domestic telecoms companies, including China
Unicom and China Telecom Corp, and domestic financial institutions
for anti-trust practices.
U.S. companies aside from Qualcomm have also been caught up in the
investigations, including software giant Microsoft Corp. Such probes
have rekindled concerns that the Chinese government may be using the
anti-monopoly law to support domestic firms at the expense of
foreign companies.
(Reporting by Ben Blanchard; Additional reporting by Michael Martina
and Beijing newsroom; Editing by David Clarke and Ryan Woo)
[© 2014 Thomson Reuters. All rights
reserved.] Copyright
2014 Reuters. All rights reserved. This material may not be
published, broadcast, rewritten or redistributed. |
