The Chinese regulators have launched an anti-trust investigation against Ericsson over complaints against its intellectual property licensing practices, an unusual move that comes as Chinese companies increase efforts to gain ground in the race to 5G.
“The State Administration for Market Regulation (SANR) has started an inquiry into Ericsson’s IP practice given the complaints from relevant enterprises,” (our translation) the company said in a statement sent to TechNode on Monday. Ericsson declined to comment on an ongoing investigation, but maintained that it licenses its patents based on fair, reasonable, and nondiscriminatory (FRAND) terms, and will fully cooperate with the probe.
According to Chinese media outlet Laoyaoba, a number of Chinese smartphone manufacturers were said to have lodged earlier complaints against Ericsson on allegations of breaking anti-trust rules in its 3G and 4G patent licensing practice. Two Chinese industry insiders declined to name the companies when contacted by TechNode on Monday.
This is the second probe of a foreign enterprise by Chinese anti-trust regulators following the record fine imposed on Qualcomm in February 2015. The US telecommunication giant paid RMB 6.08 billion (around $975 million) for abusing its dominance in the Chinese market with infractions including over-priced royalties and tie-in sales, reported Tencent Tech.
The investigation comes as Chinese tech giants step up efforts to gain an upper hand in an escalating global 5G race. A US government official in said in late March that the Department of Defense was in talks with Huawei rivals including Ericsson and Nokia about its 5G roll-out plan, adding that many EU allies were “leaning forward” in a 5G cooperation for military use.
Ericsson is the world’s top telecommunications infrastructure provider after surpassing Huawei in 2018 for the first time in two years with 29% market share in 2018, Nikkei reported citing research firm IHS Markit. The Swedish telecommunication giant announced a global patent licensing agreement with Chinese smartphone maker Oppo in February, including a cross-licensing deal for 2G, 3G and 4G patents.