An investigation into the royalty rates charged by Ericsson in India has been widened by the country’s antitrust body.
The move was prompted by the Delhi-based mobile device maker Intex Technologies alleging that the Swedish company is charging high royalty rates on its patents for mobile phones and tablet computers.
According to The Wall Street Journal (WSJ), Intex filed its complaint to the Competition Commission of India (CCI) last October, saying Ericsson demanded “exorbitant royalty rates and unfair terms for licensing its patents”.
The CCI said it would investigate the complaint, a process which could take as long as two months. The probe will look into the role of the executives involved.
If Ericsson is found to have behaved incorrectly, it could face a significant financial penalty.
Ericsson told Mobile World Live that it has made “numerous attempts” to sign a licence agreement with Intex on fair, reasonable and non-discriminatory terms, “but have to date failed to do so”.
“Ericsson does not agree with the allegations made by Intex Technologies but will fully cooperate with the authorities to reach a fair and reasonable conclusion,” the company added in its statement.
The CCI is already investigating Ericsson following a complaint by Micromax Informatics, the third-largest handset maker by sales in India.
Micromax said Ericsson is using its dominant position to demand excessive payments and is charging different companies different fees for the same technology.
According to The Wall Street Journal, Micromax paid Ericsson royalty fees equivalent to 1.25 per cent to 2 per cent of the price of each device it sells. It also paid Ericsson $2.50 for each internet dongle it sells.
The Intex and Micromax investigations will be combined, the Commission told The WSJ.
The result of the probe could impact the profitability of more than 20 handset companies that sell devices using Ericsson technology in India.