China fines Qualcomm $1B
bloomberg.com
bloomberg.com
No, it doesn't. Just like every other neoliberal economy out there, since when has China's government started caring about the consumers?
The Chinese government is "punishing" Qualcomm for monopoly, yes, but it has nothing to do with the consumers.
"fueling concern that the country -- the world’s second-largest economy -- is using such inquiries to boost its native enterprises."
No shit. Look at all the local clones/"competitors" that have started doing very well after the original companies have been eliminated from the market (Google, Dropbox, just to name two obvious cases).
It's all about lobbying, the kind that you don't find in public records - i.e. bribing and corruption.
To be more specific, because the parallels may not be evident, the IP tactics of a burgeoning industrial nation are likely to be underhanded because the system favors the established power (see patents within the US). I find it extremely amusing to watch the US crow about IP when its very own industrial base was built upon foreign tech... just like China today.
Irrelevant nationalism. What does the U.S have to do with China's blatant IP theft? Plenty of my non-American friends have lost quite a bit due to China's underhanded tactics, and they're not big players. China isn't stealing IPs from the U.S because it's "America", they're stealing any IP they can get their hands on, whether it's from America, Russia or Bulgaria. They've already "caught up" to the rest of the world as far as technological development goes, now they're trying to get ahead.
It's largely the reason why every country who participates in the ISS wants absolutely nothing to do with China and wouldn't let them participate in the program. There was a vote and it was unanimous. Participating in the ISS would have opened the doors to a lot of sensitive and classified IPs and nobody trusts China enough not to abuse their position of corroboration.
China is literally bursting with corruption and it boggles my mind why anyone would want to do business there. My experience with that country is that if you're not corrupt, you stand no chance. It's not something that's underhanded or kept "hush hush", but par for the course. Expected.
China really is shooting itself in the foot here. It's not just America they're pissing off and scaring, but the rest of the world. America isn't the only country with IPs to lose, and if you think everyone else isn't paying attention, then you're naive.
That may be the face of the US tech industry that shows up on TechCrunch but the reality is that the rest of the industry is far more varied and much deeper than consumer apps like that.
Healthcare, energy, aerospace. Those—and a few dozen more—are all tech industries worried about IP protection. They just aren't sexy and don't make it to the top of HN.
Energy is the industry where US producers of photovoltaic panels — the primary source of marketed energy for the world starting in the 2020s — have had to seek domestic protection behind punitive tariffs against the Chinese manufacturers who are dominating the market by relentlessly copying each other’s innovations. Evergreen Solar, the only pure-play US photovoltaic company, went bankrupt in 2011.
The part of the US energy industry that’s actually an economic bright spot is oil and gas extraction. I don’t know much about their economic structure. Maybe you can elaborate?
Aerospace is indeed an exception to the overall pathetic performance of the US tech industry, and the 481,400 people working in 3364 aerospace in the US are rightly proud of that, although you’ve probably noticed that a lot of US companies that want to launch satellites end up having to buy launch services from Russia or Europe. But the US aerospace industry is largely supported by the US Department of Defense (74% of Lockheed’s income is from the military, and 45% of Boeing’s income is from BDS), and the DoD does not consider it an option to buy from lower-cost and higher-quality manufacturers in China or even Europe. That massive DoD R&D subsidy is what enables companies like Boeing and Lockheed Martin to compete overseas (admittedly, against other similarly-subsidized competitors).
And then immediately follow with "While the percentage being charged is similar, the value of the handsets -- used as the basis for the calculation -- will be assessed at 65 percent of the device’s total price for phones sold in China, Qualcomm said."
If read right, that means Qualcomm is forced to effectively discount licensing fees in China based on this decision, meaning the Chinese government has engaged in a bit of price-fixing relative to the rest of the world on the patent fees.
I don't know how China defines a monopoly relative to the U.S. definition, but Qualcomm seems like a natural candidate.
When a patent covers a stand-alone product, you may be able to avoid licensing by developing an innovative or otherwise differentiated product. But when patents cover critical portions of a standard, your hands are pretty much tied.
It is starting to really annoy me when powerful countries like China and my country, tha USA, throw their weight up against companies just doing business. This article is about one example with China, and my personal pet peeve is the USA under FICA laws brutalizing (sometimes small) banks in developing countries for not keeping up with the paperwork demanded by the empire.
It seems to me that the world needs an effective way for small countries to not get rolled over, including unfair patent portfolio attacks. If this article was about a small developing country vs. Qualcomm my reaction would be different.
Patents only exist because governments offer companies a framework to have government-backed enforcement of a property right. If Qualcomm want to do business without government interference, let them go without copyright, trademarks, and patents.
But Qualcomm refused to withdraw those claims. Just to be nasty. So I don't feel sorry for them.
Wow, is that a common tactic? No wonder antitrust was on them.
And more specifically, 4g phones usually have fallback to 3g or even lower speeds, so if you're going to build a 4g phone, you almost always need to license the tech for 3g and prior. Unbundling the patents in this situation is great theoretically, but in practice it is likely to result in licensees not licensing enough patents, opening themselves up for patent lawsuits.
e.g. Roger sells both candy bars and packs of gum, both of which cost him $0 to produce (for simplicity). Al is willing to pay $5 for a candy bar, but $1 for a pack of gum. Jesse willing to pay $1 for a candy bar and $5 for a pack of gum. Roger could sell one candy bar to Al for $5 and one pack of gum to Jesse for $5 for a total profit of $10. More optimally, Roger could sell a bundle consisting of both the candy bar and the pack of gum to both Al and Jesse for $6 for a total profit of $12. Bundling has optimally increased Roger's profits.
That's why the auction for the 600 Nortel patents was so important, they all need to cross-license from each other in order to build a product. Yes, having those patents means you've got more weight to swing around in the patent war, but you can't really build a telecommunications product without licensing a bunch of patents.
Again, theoretically this is an awesome idea. But in practice, this is really just government-sponsored theft from Qualcomm, and the only reason that Qualcomm is going with the flow is because China would be a huge market to lose. So they used to make $100 and they now make $65, or maybe even $25 due to reduced patent licensing? Better than $0.
It's accounted for as revenue via fines and spent according to the normal budget.
For example, in Michigan cops used drug money to buy drugs: http://reason.com/blog/2012/10/15/michigan-cops-used-asset-f...
EDIT: Yes slightly off topic but Vuforia is owned by Qualcomm and recently surprised all SDK developers with the bait and switch to licensing from free for commercial. But it has happened so drastically that there is no way to find out what it costs, "contact sales" is the answer but no response from them yet. It was very rushed see here: https://developer.vuforia.com/forum/vuforia-40-beta/prices-a... This is a good example of how not to introduce pay commercial licensing on something that used to be free.