China probes Sweden’s Ericsson over licensing

Swedish telecom giant Ericsson said yesterday that China’s market regulator was investigating the company over licensing issues as countries around the world prepare to roll out the next generation of mobile networks.

China’s State Administration of Market Regulation is investigating the firm due to complaints against its intellectual property rights licensing in China, a spokesperson for Ericsson said. The telecom gear maker earns about seven percent of its revenue in China, according to its 2018 annual report.

China’s market regulator dispatched roughly 20 investigators to raid Ericsson’s Beijing office on Friday, the Wall Street Journal reported earlier, citing a person familiar with the matter. “Ericsson is fully cooperating with the investigation and will refrain from further comments while it is ongoing,” a spokesperson for the company said in an emailed statement.

Ericsson and its US-based competitor Qualcomm own a large portion of patents connected to 3G and 4G mobile networks and devices and have come under fire for the high licensing royalties they charge. Qualcomm in 2015 agreed to pay a 6.1 billion yuan (nearly $1 billion) fine and said it would modify its business practices in China to end an official anti-trust investigation triggered after unnamed industry players complained the firm was abusing its market dominance to charge high prices.