By CCTV reporter Feng Xin
China's Communications Industry Association is filing a complaint against Qualcomm, the world's largest wireless chipset provider. The CCIA alleges that Qualcomm is overcharging Chinese mobile makers on patent fees and boosting sales by tying products. The CCIA says six in ten smart phones in China use chipsets designed by the American company.
The CCIA filed a report with China's top economic regulator in January after visiting two thirds of its 30 member companies. Industry insiders say that for a 1,000-yuan smart phone, five percent of the sale goes to Qualcomm.
"Overseas patent owners charge a lot of dollars and the consequence is that the entire Chinese mobile phone industry is reduced to manufacturers. Their profits are taken by global companies," said Wang Yanhui from China Communications Industry Association.
Qualcomm says it's cooperating with an investigation by the National Development and Reform Commission and it's been asked to not reveal more details about the situation at the moment. Qualcomm says it has invested billions of dollars in research and development and is charging Chinese mobile phone providers reasonable authorization fees.
Chinese experts, however, say whether patent fees are reasonable depends on the company's market position. China's anti-trust law specifies that if a company has more than 50 percent of market share, it can be considered as having a dominant position in the market.
"Qualcomm sells us baseband processors, also known as the baseband processors of cellular communications. It takes over two thirds of the market. There is no doubt that it has a dominant market position," said Ni Guangnan from Chinese Acedemy of Science.
Some experts believe Qualcomm's calculation of patent fees based on the final price of a complete product is problematic. But they also point out that the legal dispute has been partly caused by the fact that Chinese mobile phone producers don't own core technologies.
China's anti-trust law says that Qualcomm could face a fine of more than one billion U.S. dollars if it is ruled liable in the case.