Fair trade regulator CCI (Competition Commission of India) on Friday ordered a detailed probe against Swedish telecom giant Ericsson, after it 'prima facie' found the company in violation of the competition norms.
The order followed complaints that the practices adopted by Ericsson with regard to royalty rates were discriminatory as well as contrary to FRAND (fair, reasonable, and non-discriminatory) terms, the CCI said.
"The royalty rate being charged by Ericsson has no linkage to the functionality of the patented product; rather it has linkage to the final price of the manufactured product in which the patent is being used,” it said.
The CCI said that charging of two different licence fees per phone for use of the same technology appeared to be discriminatory.
Instructing the Director General to investigate the matter within 60 days, the CCI said that forcing a party to execute Non Disclosure Agreement and imposing excessive and unfair royalty rates amounted to an abuse of dominance in violation of section 4 of the Competition Act.