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China official says has 'substantial' evidence in Qualcomm antitrust case: media

A Qualcomm sign is seen at one of Qualcomm's numerous buildings located on its San Diego Campus February 7, 2011. REUTERS/Mike Blake
A Qualcomm sign is seen at one of Qualcomm's numerous buildings located on its San Diego Campus February 7, 2011. REUTERS/Mike Blake

By Michael Martina

BEIJING (Reuters) - China's top economic planning agency has "substantial evidence" against chipmaker Qualcomm Inc in an antitrust probe, state media on Thursday quoted a senior official at the price regulator as saying.

The official English-language China Daily attributed the comment to Xu Kunlin, head of the National Development and Reform Commission's (NDRC) anti-price-fixing bureau, in the agency's first public comment on the case.

The report gave no further details.

Qualcomm, the world's biggest maker of cellphone chips, said it believed its business practices were "lawful and pro-competitive".

The company will continue to cooperate fully with the NDRC and is looking forward to a first meeting with the agency, Christine Trimble, Qualcomm's vice president for public affairs said in an emailed statement.

Qualcomm sees China as a key market as growth in smartphones shifts away from the United States to developing countries and as China Mobile prepares to upgrade to high-speed networks using technology developed by Qualcomm.

The NDRC has been stepping up its anti-monopoly enforcement over the past several months. It handed down record fines to six milk powder companies, including Mead Johnson Nutrition Co and Danone, in August and has also punished domestic jewelers for antitrust violations.

Xu was also quoted as saying the agency would add at least 170 people to its price-fixing enforcement teams as it redoubles efforts to tame anti-competitive behavior in major industries, including the automotive sector.

Twenty of those employees will join its Beijing office, boosting its size from its current 46 employees, the China Daily said.

The expansion "reflects the country's determination to deal with price fixing", the newspaper said.

Xu also called for the merger of his bureau with antitrust divisions at the Ministry of Commerce and the State Administration for Industry and Commerce, two agencies with which it has "overlapping" duties.

Experts have argued that China's antitrust enforcers are woefully understaffed even as they embrace new-found global clout in regulating monopolistic practices and mergers.

China is trying to restructure the economy so that growth is driven by consumption and antitrust agencies have said they will target industries where practices could lead to "unreasonably" high consumer prices.

Regulators have said they will focus on six sectors - aerospace, chemicals, automobiles, telecommunications, pharmaceuticals and home appliances.

(Reporting by Michael Martina; Additional reporting by Matthew Miller; Editing by Kazunori Takada, Nick Macfie and Edwina Gibbs)

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