China Investigates Sweden’s Ericson Over Licensing Issues

FILE PHOTO: The exterior of an Ericsson building is seen in Stockholm April 30, 2009. (Photo: REUTERS/Bob Strong/File Photo)

China's market regulators are investigating the Swedish telecom giant Ericson over licensing issues as the globe prepares to roll out the next generation of mobile networks. A spokesperson from Ericson said that China's State Administration of Market Regulation investigates the firm because of complaints against its intellectual property rights licensing in China.

Ericson, a telecom gear maker, gets the seven percent of its revenue from the Chinese market based on its 2018 annual report. The spokesperson said that the Chinese regulator assigned roughly 20 investigators to raid the office of Ericson in China on Friday.

The raid was confirmed by the report of the Wall Street Journal earlier. An email statement from the spokesperson of the company said that Ericsson is fully cooperating with the investigation and will refrain from further comments while it is ongoing.

The company and its biggest competition, the United States-based competitor Qualcomm, holds a large portion of patents connected to 3G and 4G mobile networks.

The company became controversial after they were accused of high licensing royalties they charge.

In 2015, Qualcomm paid 6.1 billion yuan as a fine and they assured to modify its business practices in China to end an official anti-trust investigation which was triggered by complaints from unnamed industry players that the firm abuses its market dominance to charge high prices.

The spokesperson of Ericson said that, in the company, they license their industry leading patent portfolio on FRAND (Fair, Reasonable and Non-Discriminatory) terms and conditions and have always been committed to these FRAND principles.

Huawei, a Chinese homegrown tech giant, earned a large number of patent needed by companies to license before rolling out the next generation 5G mobile networks and devices.

Huawei is currently the leading producer of telecommunications gear and has been controversial in recent months after the arrest of its top executive in Canada and the global campaign of the United States to boycott the company's equipment for national security reasons.

John Suffolk, Huawei's chief security officer, and the United Kingdom's former chief IT adviser, said that the politicians in the United States failed to produce any evidence to back their claims that Huawei's 5G mobile technology could be hacked by Chinese spies to eavesdrop on sensitive phone calls or they could crash driverless cars.

He said that the United States can't keep saying that Huawei has got some dodgy technology. He added that Edward Snowden revealed all kind of things going on with American technology.

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