Fines Expected After China's Qualcomm Investigation - NBC 7 San Diego
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Fines Expected After China's Qualcomm Investigation

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    LAS VEGAS, NV - JANUARY 06: Qualcomm CEO Steve Mollenkopf speaks during a press event at the Mandalay Bay Convention Center for the 2014 International CES on January 6, 2014 in Las Vegas, Nevada. CES, the world's largest annual consumer technology trade show, runs from January 7-10 and is expected to feature 3,200 exhibitors showing off their latest products and services to about 150,000 attendees. (Photo by Justin Sullivan/Getty Images)

    The Chinese government is close to settling its antitrust investigation with Qualcomm Inc., according to the Reuters news service, citing a Dec. 26 statement to that effect from China’s National Development and Reform Commission.

    Reuters said that Qualcomm (Nasdaq: QCOM) and Chinese officials concluded a seventh round of talks earlier this month, that the government wants to wrap up the investigation as soon as possible, and that the Chinese agency is expected to levy fines against the San Diego company that could exceed $1 billion.

    The Chinese government informed Qualcomm in November 2013 that it was investigating whether the company represented a monopoly. Qualcomm, San Diego’s largest company, produces wireless communications microchips and collects royalties on its wireless technology patent portfolio.

    Reuters reiterated previously disclosed information that Qualcomm faces investigations from the U.S. Federal Trade Commission and European regulators, saying the settlement of the China issue may not be the end of Qualcomm’s antitrust troubles. Qualcomm disclosed the U.S. and European investigations in a Nov. 5 securities filing, saying that it was informed of them in September and October.

    Qualcomm is not the only foreign company at the center of a Chinese antimonopoly investigation. Microsoft Corp. and auto manufacturers have also faced antimonopoly investigations this year, according to Bloomberg. Reuters reported earlier in December that President Obama pressed Chinese President Xi Jinping on the country’s enforcement of antitrust policy during a meeting in November; the Reuters account noted that the president’s message was one that would most notably benefit Qualcomm.

    In other legal news, one of Qualcomm’s courtroom rivals disclosed that it was adding to its war chest.

    Parker Vision Inc., which says it invented certain technologies that Qualcomm patented, said in a Dec. 23 securities filing that it will receive up to $7 million from an entity called 1624 PV LLC to pay legal fees and expenses for future patent infringement litigation. Parker Vision (Nasdaq: PRKR) is based in Jacksonville, Fla.

    In June, a federal judge threw out a $173 million damage award that a Florida jury ordered Qualcomm Inc. to pay Parker Vision.

    Parker Vision vowed to appeal.

    Under the deal announced in the waning days of this year, 1624 PV LLC would receive a portion of any proceeds from the litigation. In addition, the funding company announced plans to pay Parker Vision $1.3 million in cash by Jan. 15 and receive warrants to buy up to 5.65 million shares of Parker Vision stock; the warrants will be exercisable for three years. As of Dec. 29, Parker Vision stock closed at 91 cents per share.

    Qualcomm plans to exhibit and make company announcements Jan. 5 at CES, the big annual consumer electronics show in Las Vegas. Qualcomm President Derek Aberle, who has served as point man on the China negotiations, is expected to be one of the speakers. It is unclear whether the company will address any legal matters at that venue.

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