Qualcomm faces two new antitrust probes Qualcomm CEO Steve Mollenkopf Qualcomm faces three investigations into allegations of anti-competitive behaviour, as it revealed new probes in the US and EU on top of the antitrust inquiry it already faces in China. Reporting earnings on Wednesday, the wireless chip developer warned that the probe in China, which began last year, presented "significant challenges" in forecasting the year ahead. Its annual report disclosed two new investigations had begun in the last month, one into its patent licensing business by the Federal Trade Commission in the US and the other into its baseband chip set business in Europe. Qualcomm said the two new inquiries were "very preliminary" and in the "information gathering stages." Analysts had previously seen the Chinese probe as part of a wider backlash against foreign companies there, in the wake of revelations by Edward Snowden about the US technology industry's alleged role in American spying. "We are fully co-operating with these agencies and believe our practices comply with the laws of their countries," said Steve Mollenkopf, Qualcomm's chief executive. Qualcomm supplies cellular chips to many of the world's mobile device makers, including Apple and Samsung, and holds intellectual property central to how 3G and 4G networks operate. Shares in Qualcomm fell around 6 per cent in after-hours trading, after it reported revenues and earnings below Wall Street's expectations and warned that its outlook was muddied further by "underreporting" of sales by some Chinese customers, who it said may be waiting for the conclusion of the regulatory inquiry there before striking new licensing agreements. "Bringing this matter to closure remains a top priority for the management team," said Derek Aberle, Qualcomm's president, referring to the Chinese antitrust investigation. He warned that a "wide range of outcomes" was possible, leading to potentially greater fluctuation in quarterly performance. While the three investigations are separate and relate to different parts of Qualcomm's business, Mr Aberle noted that regulatory enquiries in one region could prompt questions in other parts of the world. China's National Development and Reform Commission began an investigation into Qualcomm in November 2013 related to its intellectual-property licensing business. If found guilty, Qualcomm could be fined up to 10 per cent of its prior year's revenues, potentially exceeding $1bn, and be forced to change how it does business in China. "We also believe that certain licensees in China currently are not fully complying with their contractual obligations to report their sales of licensed products to us," Qualcomm added, "and that unlicensed companies may seek to delay execution of new licenses while the [Chinese antitrust] investigation is ongoing." As a result, Qualcomm said it expected $26.8bn to $28.8bn in revenues in fiscal 2015, just below Wall Street's forecasts. Qualcomm said the low end of its guidance assumed no resolution in the various investigations. Half of Qualcomm's revenues last year came from customers and licensees based in China, where most of the world's smartphones are manufactured. Chinese sales grew by 7.4 per cent to $13.2bn last year, a considerable slowdown over the prior year's 54.2 per cent rise. The FTC is examining Qualcomm's patent licensing business, which the regulator said may have breached requirements to give other companies access to certain kinds of its technology on a fair, reasonable and non-discriminatory basis. The EU is looking into antitrust concerns related to the sale or marketing of its baseband chipsets, "including alleged conditions relating to the provision by us of rebates and/or other financial incentives." Qualcomm said it would "vigorously defend" itself in these investigations. Reporting results from its fiscal fourth quarter, Qualcomm's sales of $6.7bn, up 3 per cent, fell short of analysts" forecasts of $7bn, while net income rose 26 per cent to $1.89bn. Earnings per share, adjusting for certain items, were $1.26 per share, just below analysts" expectations.