Ericsson under anti-trust investigation by Chinese government as 5G competition heats up around the globe

A 5G contender gets a “surprise visit” on Huawei’s home turf.

By

Ericsson under anti-trust investigation by Chinese government as 5G competition heats up around the globe

Swedish telecoms giant Ericsson has confirmed that it is being investigated by China’s market regulator over complaints against its intellectual property rights licensing practices.

Ericsson said in a statement to KrASIA that it was “fully cooperating with the investigation”.  “At Ericsson, we license our industry leading patent portfolio on FRAND (Fair, Reasonable and Non-Discriminatory) terms and conditions and have always been committed to these FRAND principles.,” the company said in the statement.

China’s State Administration for Market Regulation has reportedly given Ericsson’s Beijing office a “surprise visit” after Chinese mobile phone makers lodged complaints against the Stockholm-based company for violating anti-trust law in its 3G and 4G patent licensing practice.

The investigation is believed to be the first anti-monopoly investigation against a foreign telecommunications company in China since Qualcomm’s case. China’s National Development and Reform Commission launched an anti-monopoly probe against Qualcomm in 2014, leading to a USD 975 million fine and a drastic decrease of patent loyalties.

Ericsson, like Qualcomm, is a leader of the global telecoms market and a formidable rival to China’s tech juggernaut Huawei, which is under mounting political pressure fomented in the United States and some of its allied nations.

The Swedish company’s president and CEO Borje Ekholm wrote in February that “we are tech leaders—in the market where it really matters.”

Ericsson dethroned Huawei as the world’s largest telecoms infrastructure provider in 2018 with a 29% global market share, according to British research firm IHS Markit. Huawei has been struggling to establish a foothold in the North American market, where Ericsson controlled a dominating share of 68%.

The anti-monopoly investigation comes two months after Ericsson’s announcement of a global patent license agreement with Chinese smartphone maker OPPO, the world’s fifth largest handset vendor. According to Ericsson, the deal would cover 2G, 3G, and 4G patents.

But the relationship between the Swedish telecoms giant and Chinese smartphone makers has not always been so cordial. Ericsson had previously filed a patent infringement lawsuit against Chinese smartphone maker Xiaomi in India, leading to the latter being banned temporarily from the country in 2014.

Write to Luna Lin at [email protected]