Qualcomm May Face Trouble With Chinese Regulators

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The Chinese government is holding onto substantial evidence that Qualcomm (NASDAQ:QCOM) has been engaging in price fixing in the country, Reuters reports. According to comments attributed to the head of the National Development and Reform Commission, the Chinese department that deals with practices such as price fixing, there exists real evidence that the chip manufacturer has been engaging in illegal behavior. As of yet, both the Chinese government and Qualcomm have declined to formally comment on the issue.

Qualcomm has said in the past that it intends to fully cooperate with the state in all investigations into its operations and planning in the country, after rumors surfaced that the NDRC was looking into the company in November. For a company such as Qualcomm, it is essential to remain transparent in emerging markets not only to avoid fines as much as possible but also to limit the number of inquiries into the company to as few as possible.

The NDRC has been stepping up activity as China’s government seeks to transition toward a more capitalistic society. Ironically, it is this government office that has been picking up steam, looking to find violators of the free market system. Earlier this year, the bureau brought fines against powdered milk producers after finding them in violation of the law. The NDRC has also targeted jewelry makers for illegal practices.

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