Ericsson agreed to pay €80 million to settle a damages claim by Nokia related to a bribery case in the US, a move the Sweden-based vendor warned would have a noticeable impact on earnings in the current quarter.

The vendor stated the payment relates to a $1.06 billion settlement agreed with the US government in 2019 after it admitted to bookkeeping breaches and bribery spanning 16 years.

Ericsson noted the amount it will pay to cover damages claimed by Nokia reflected “uncertainty, risk, expense and potential distraction from business focus” which could be caused by “lengthy and complex litigation”.

It expects the payment to impact its earnings before taxes in the current quarter, with a €26 million hit on cash flow. There will be lingering effects, with the payment to be spread over three instalments.

Ericsson highlighted its “zero-tolerance policy” for corruption and noted it put efforts in building a “culture of compliance”.