China's State Administration for Market Regulation. Photo: VCG

China's State Administration for Market Regulation (SAMR) announced on Friday that it has decided to initiate an investigation into Qualcomm for suspected violation of the Anti-Monopoly Law. 

Due to Qualcomm's acquisition of Israeli vehicle semiconductor company Autotalks without legally declaring the concentration of undertakings, which may be a violation of the Anti-Monopoly Law of the People's Republic of China, the SAMR has initiated an investigation into Qualcomm in accordance with the law, according to a notice posted on the SAMR's website.

Qualcomm announced in June the completion of its acquisition of Autotalks, a leading company in vehicle communication solutions.

Ma Jihua, a veteran telecom industry analyst, told the Global Times on Friday that global chip giants are currently racing to gain ground in the arena of smart transportation, and vehicle-borne chips play a vital role in this area.

Against this backdrop, some companies from the US are seeking to gain ground in the emerging sector and these actions will definitely have an impact on the Chinese market and Chinese companies, Ma said, noting that any efforts by companies to circumvent regulatory oversight in the sector won't go unnoticed.

Autotalks is an industry leader due to its early starter advantage, Ma noted.

"China's actions are both reasonable and lawful because they are strictly grounded in domestic law, which seeks to prevent anti-competitive practices," Ma told the Global Times.

Qualcomm's shares fell more than 4 percent in pre-market trading in New York, according to Bloomberg.

The Chinese government recently rolled out new steps to encourage foreign investment, showing its sincerity and determination in advancing high-standard opening-up, Foreign Ministry Spokesperson Guo Jiakun said at a regular press conference in July.

China welcomes companies from all countries, including the US, to participate in the Chinese modernization drive and to strive for greater progress while integrating themselves into high-quality development, Guo said.

In March, Chinese Commerce Minister Wang Wentao met with Cristiano Amon, president and CEO of Qualcomm, and said the Chinese government remains unwavering in pursuing high-standard opening-up, expanding market access, actively addressing the concerns of businesses, and facilitating the deeper integration of foreign-funded enterprises into the Chinese market, per a statement released by the Ministry of Commerce.

Wang noted that China is intensifying and expanding its consumer product trade-in programs, and the enormous market potential offers development opportunities for multinationals, including Qualcomm.