| | | Interesting details: China Opens Antitrust Investigation Into Qualcomm’s Acquisition of AutotalksOn October 10, 2025, China’s State Administration for Market Regulation (SAMR) announced it has opened an antitrust investigation into Qualcomm Inc.’s recent acquisition of Autotalks. The U.S. chip giant is suspected of violating China’s Anti-Monopoly Law (AML) by failing to notify SAMR about the deal. This development comes a decade after Qualcomm paid a record RMB 6.0 billion (USD $975 million) fine in China in 2015 in a dominance abuse case. The new probe underscores China’s heightened scrutiny of strategic tech acquisitions, particularly in sectors linked to automotive technology and supply chain security.
I.Background: Qualcomm/Autotalks Deal and Enforcement Context
Founded in 2008, Autotalks develops V2X chipsets that allow vehicles to communicate with other vehicles and surrounding infrastructure - an essential enabler of intelligent-transport and automotive safety systems. Qualcomm, a global leader in mobile and connectivity chips, had been investing in V2X technologies as early as 2017 and saw Autotalks as a strategic fit for its automotive portfolio.
Qualcomm first announced an agreement to acquire Autotalks in May 2023. The deal immediately drew regulatory scrutiny across multiple jurisdictions, reflecting widespread concerns that it could harm competition in emerging automotive chip markets:
- EU: the European Commission invoked its Article 22 “call-in” authority to review the Qualcomm/Autotalks deal, even though the transaction was below EU turnover notification thresholds. [1]
- UK: In September 2023, the UK Competition and Markets Authority (CMA) opened an inquiry into whether the transaction could harm competition in UK automotive-communications markets. [2]
- US: In March 2024, the US Federal Trade Commission (FTC) expressed concerns that the acquisition could reduce innovation and price competition in the market for V2X chipsets. [3]
Facing parallel reviews and uncertainty, Qualcomm abandoned the transaction in 2024. However, in June 2025, Qualcomm unexpectedly announced that it had completed the acquisition of Autotalks, reportedly at a sharply reduced price of US $80–90 million (down from the initially US $350 million). This move immediately attracted attention in China’s antitrust community.
Industry observers noted that Autotalks had partnerships with major Chinese automotive and telecom companies, and its V2X technology is compatible with Chinese C-V2X standards. Chinese experts warned the deal could undermine competition in the automotive chipset market and the broader intelligent transportation ecosystem If Qualcomm were to exclusively control Autotalks’ advanced V2X solutions and bundle them into its patent licensing programs. In June 2025, a prominent Chinese antitrust scholar even published an open letter urging SAMR to investigate the Qualcomm/Autotalks deal, suggesting that if the transaction fell below formal thresholds, the agency should invoke its discretionary “call-in” power. However, SAMR did not respond to the scholar’s letter, according to the latest blog of the scholar.
II. Failure to notify: China’s Merger Filing Requirements and Procedural Implications
Under Article 25 of China’s AML, mergers, acquisitions, or other transactions that constitute a concentration of undertakings shall be notified to SAMR in advance if the involved undertakings’ turnover meets the statutory thresholds. [4] Even where a transaction falls below those thresholds, Article 26 empowers SAMR to require notification of sub-threshold deals if there is evidence the deal “has or may have the effect of eliminating or restricting competition”. In short, companies must proactively file qualifying deals, and SAMR can call in a problematic deal of any size for review.
A. Possible Bases for SAMR’s Investigation
According to Qualcomm’s 2024 Annual Report, the company generated US $38.96 billion in global revenue, including US $17.83 billion in China. Given this scale, several scenarios may explain SAMR’s investigation:
Qualcomm is a large player in China – in fiscal 2024 it derived about 46% of its $39 billion global revenue from Chinese customers. [5]Autotalks, by contrast, is relatively small; its China sales in 2024 are not publicly known. Two scenarios could have triggered SAMR’s probe:
- If Autotalks’ 2024 China turnover exceeded RMB 800 million, the deal required pre-merger notification and clearance by SAMR before closing. Qualcomm’s rush to complete the acquisition without filing would thus be a straightforward “gun jumping” violation of the AML’s filing obligation;
- If Autotalks’ China revenue was below RMB 800 million, the transaction technically fell outside the mandatory filing thresholds. However, SAMR could evidently determine that the deal “has or may have” anticompetitive effects, given Autotalks’ important position in V2X technology. Pursuant to the AML and implementing rules, SAMR can order the parties to file post-closing in such cases. SAMR would issue a notice requiring a notification within a specified period (typically 120 days) and may also demand that the parties suspend further integration of the acquired business during review. Qualcomm’s case suggests the company either failed to submit the required notification in time or did not halt implementation - either of which would constitute an illegal implementation of a concentration.
B. Potential Development (Fines) of SAMR’s Investigation
SAMR’s official announcement did not disclose which of the above scenarios is at play, but either way it signals a breach of procedure. If Qualcomm - as the acquiring party who is obliged to notify - is found to have violated the AML by failing to notify, Chinese law provides for several tiers of penalties, depending on the severity and effects of the violation:
- No competitive harm: A fine of up to RMB 5 million for procedural violation.
- Competitive harm found: A fine of up to 10 % of Qualcomm’s previous-year sales revenue, with potential conditional approval imposing structural or behavioral remedies. SAMR may prohibit the transaction if the competition concerns could not be addressed.
- Especially serious cases: Pursuant to Article 63 of the AML, SAMR may increase the fine by two to five times if the violation has “particularly grave consequences”.
It is important to note that SAMR’s announcement is just the beginning of a process. The investigation will involve complex assessments – such as determining the relevant revenue (Chinese vs. global turnover) and proving the deal’s impact on competition in V2X and automotive semiconductor markets. Qualcomm is expected to mount a vigorous defense. The company can also appeal any eventual SAMR decision in Chinese courts, potentially arguing that SAMR overstepped its authority (for instance, challenging a “call-in” of a below-threshold deal or disputing the evidence of competitive harm).
III. Take Away: China’s Fast Developments in Gun Jumping Investigations
China’s investigation into Qualcomm’s acquisition of Autotalks highlights the strategic and procedural importance of merger control as a cornerstone of M&A compliance - both in China and globally. For companies pursuing acquisitions in sensitive or high-tech sectors, merger filing is not a formality but a fundamental regulatory checkpoint. Failure to respect it can expose parties to substantial penalties, reputational risks, and even forced unwinding of transactions.
It will also be interesting to watch how other antitrust regulators respond going forward. Qualcomm’s revived acquisition of Autotalks in 2025 seemingly proceeded without formal clearance in jurisdictions like the EU, UK, or US – possibly because the deal size and Autotalks’ revenues fell below traditional thresholds. However, Qualcomm could still face multi-jurisdictional headaches if authorities outside China decide to follow SAMR’s lead.
Automakers and others in the automotive supply chain could view the investigation as a positive development. In recent years, many car manufacturers have been locked in patent licensing disputes with major telecom chip patent holders. Qualcomm is a leading contributor to the Avanci patent pool (which licenses cellular connectivity patents to car makers). Chinese antitrust regulators have already signaled concern in this arena - in June 2024, SAMR issued a warning letter to Avanci, urging the patent pool to review its licensing practices for potential antitrust issues. A tougher stance against Qualcomm’s market behavior could bolster the negotiating position of automakers, helping ensure more competitive pricing and access to essential V2X technologies.
Beijing Dacheng Law Offices, LLP is an independent law firm with more than 8,000 lawyers in 48 offices across China. With close cooperation with Dentons, we are able to provide our clients the full spectrum of legal services including but not limited to Corporate and M&A, Dispute Resolution, Intellectual Property, Competition and Antitrust & Cybersecurity and Data Compliance. If we can be of assistance, please visit www.dacheng.com.
lexology.com |
|
