In the news: Qualcomm gets fined US$975 million, China bans fake online accounts and the SEC settles with the Big Four

Qualcomm fined US$975 million

US chipmaker Qualcomm will pay US$975 million for violating China's Anti-monopoly Law. It will also offer its licences for third- and fourth-generation communications systems for high speed wireless data to smartphones at a discount to what it charges companies in other countries. The settlement is nearly double the amount the court charged British drugmaker GlaxoSmithKline in September (US$470 million) for bribery and is larger than all AML fines given by the NDRC in 2014 combined. Qualcomm's CFO has said he was disappointed with the size of the fine. But unfortunately the Chinese market and its potential for profit is too big for MNCs to ignore (China is the largest smartphone market and has the world's most internet users). The arguments about targeting foreigners continue, but what foreign tech companies should really focus on is rethinking their strategies. China has its own plans.

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Understanding the PRC anti-monopoly regime
China question: What should I do when I'm being investigated?
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Blurring antitrust and anti-corruption
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China bans fake online accounts

From March 1 2015, China will ban internet accounts that impersonate people or organisations and enforce the real-name requirement for registering online accounts. The Cyberspace Administration of China said the new regulations are aimed at halting the spread of rumours online and that internet companies and ISPs will be responsible for enforcing the rules. Companies that will have to comply include Tencent, which runs instant-messaging services WeChat and QQ and microblog Weibo. Regulators also issued new rules that require writers who publish online to use their real names and imposed similar identification requirements on app developers and online video uploaders. But in order to guarantee the genuine identity of an account, online companies will have to collect more personal information from its users. Here lies the catch-22 of trying to preserve the “safety” of the internet…

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Clamping down on online personal data privacy
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Courts get tough on ISPs
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SEC settles with Big Four

The US Securities and Exchange Commission has reached a settlement with the Chinese arms of the Big Four accounting firms in the dispute over turning over auditing working papers. The firms will avoid a temporary suspension of their right to audit US-traded firms and each will pay US$500,000. The four also agreed to follow procedures designed to give the SEC access to Chinese firms' audit documents through the CSRC. The longstanding dispute threatened to complicate the audits and fundraising of Chinese companies and US MNCs, but the settlement, according to accounting professor Paul Gillis, falls far short of what is needed to protect investors. He would like to see a comprehensive deal between China and the US to allow the SEC complete access to the documents necessary to enforce US securities laws on Chinese companies listed in the US. It looks like China got its way in the end.

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Opinion: Why the audit disclosure feud needs compromise
SEC spat needs diplomatic solution


Carbon trading needs unified regulatory system

The lack of a unified regulatory system governing China's emerging carbon offset market has led to large price discrepancies across the regions, causing uncertainty among both buyers and project developers. The national carbon offset registry was launched earlier last month, allowing China Certified Emission Reductions (CCERs) to be bought and sold in the country's seven pilot schemes. The move was an important step but the large variations in price among the platforms pose challenges for harmonising the markets. The confusion can also cut profits from developers and funds as well as deter investment in certain CCER-generating projects. Beijing and Shanghai are the only markets with complete rules so far and the other pilots need to catch up and coordinate soon. Unfortunately, despite the national priority of environmental protection, we don't expect this to move at a very fast pace.

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Carbon trading: A new dawn in China
State Council, Guiding Opinions on Further Promoting the Pilot Project for the Use for Consideration and Trading of Emission Rights
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