China raids Ericsson after license fee complaints

Last Friday, Chinese investigators raided Ericsson’s offices in Beijing after receiving complaints about the licensing fees that Ericsson charges phone makers.

Amid the background of increased global tension over Chinese vendors’ 5G technology being banned by the US and other countries, officials from China’s State Administration for Market Regulation (SAMR) are looking into Ericsson’s patent licensing practices after receiving complaints.

In an email to FierceTelecom, an Ericsson spokesman confirmed that the company was under investigation by SAMR.

“Ericsson can confirm that the Chinese SAMR has formally initiated an investigation due to complaints against Ericsson’s IPR licensing practices in China. Ericsson is fully cooperating with the investigation and will refrain from further comments while it is ongoing.

“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.”

Last month Ericsson claimed to have 49,000 patents, while Huawei counted 87,805 in its 2018 annual report.

The Wall Street Journal said that roughly 20 SAMR officers raided Ericsson’s Beijing offices on Friday. Earlier this year, Chinese mobile phone makers complained about Ericsson’s licensing practices. Chinese media reports implied that licensing fees paid to Ericsson would increase with the rollout of 5G technologies and services.

China’s People’s Posts and Telecommunications News said in an online report that Chinese smartphone vendors were concerned that Ericsson would impose 5G patent fees on top of the current fees for 3G and 4G technologies.

China-based Huawei is battling Apple as the world’s second-largest smartphone maker behind Samsung.

Last month, Huawei filed a lawsuit against the US government challenging a recently passed law that bans federal agencies from buying Huawei products.

Huawei was the top vendor globally in the wireless packet core (WPC) market last year while rivals Ericsson and Nokia rounded out the top-three spots. A February report by Dell’Oro said that Huawei was the largest global equipment service provider last year with more than a 30% market share.