Fair trade watchdog to probe Ericsson on Intex complaint

Acting against Ericsson once again, the Competition Commission of India (CCI) has issued another order for probing allegations that the Swedish telecom gear maker violated fair trade norms by charging higher royalty for technology patents.

The fair trade watchdog's latest action for probe against Ericsson has come on domestic mobile phone firm Intex Technologies' (India) complaint, which is similar to that made by home grown handset maker Micromax.

CCI, in an order dated January 16 but released on Friday, has said that there is prima facie evidence of Ericsson being dominant in GSM and CDMA technologies market in India since the entity held a large number of related patents.

According to CCI's latest order, the charges made with respect to royalty rates "made it clear that the practices adopted by opposite party (Telefonaktiebolaget LM Ericsson) were discriminatory as well as contrary to FRAND (fair, reasonable and non-discriminatory) terms".

On November 12 last year, the CCI had ordered investigation against Ericsson for similar allegations. Noting that the allegations are similar in both cases, the regulator has said the probe, with respect to Intex's complaint, can be "clubbed" with the investigation ordered in November.

The investigation would be carried out by the CCI's investigation arm - Director General (DG).

As per the latest order, Ericsson had 33,000 patents to its credit, with 400 of these patents granted in India. The company was the largest holder of SEPs (standard essential patents) for mobile communications like 2G, 3G and 4G that are used mainly used for smart phones and tablets.

Intex had alleged that royalty rates demanded by Ericsson were excessive and discriminatory. The telecom equipment major has also been alleged of imposing unfair terms for licensing its patents.

"The royalty rates being charged by the opposite party had no linkage to patented product, contrary to what is expected from a patent owner holding licences on FRAND terms," CCI said.

It further said that refusal of Ericsson to share commercial terms of FRAND licences with licensees "fortifies" the accusations of Intex.

Ericsson in a statement said it does not agree with the allegations made by Intex Technologies.

However, the company emphasised that it would fully co-operate with the authorities to reach a fair and reasonable conclusion.

"Ericsson has made numerous attempts to sign a license agreement with Intex Technologies on fair, reasonable and non-discriminatory (FRAND) terms but have to date failed to do so," the statement noted.

"We are aware that Intex Technologies now have filed a competition claim with the Competition Commission of India against us."