* Chinese academic took "huge rewards" from Qualcomm -Xinhua
* Certain multinationals trying to delay probes -Xinhua
* European Chamber of Commerce concerned over series of
(Adds Qualcomm reaction, background on the academic Zhang)
By Ben Blanchard and Matthew Miller
BEIJING, Aug 14 Qualcomm Inc, under
investigation for possible monopolistic practices in China, said
it had no direct financial links with an antitrust expert sacked
from a government advisory post after state media reported he
had received payments from the firm.
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 scrutinised 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
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
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.
Zhang had "contravened work discipline" and been removed
from his position on the anti-monopoly committee, reported
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.
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.
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
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
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