Competition Commission of India (CCI) would probe Ericsson for alleged abuse of its dominant position in charging higher royalty on GSM technology patents, following a complaint by handset maker Micromax.
"The CCI has now decided to refer the case to the Director General for an in-depth investigation. Ericsson will fully cooperate with the authority in this investigation to reach a fair and reasonable conclusion," Ericsson said in a statement.
Micromax had complained that Sweden-based Ericsson was demanding unfair, discriminatory and exorbitant royalty for its GSM technology-related patents.
"In March 2013, Ericsson sued the Indian company Micromax for patent infringement in Delhi High Court, India. Ericsson had before that made numerous attempts to sign a license agreement with the company on Fair, Reasonable and Non-discriminatory (FRAND) terms."
"As part of its general defense, Micromax has filed a complaint to the CCI," it noted.
A document on CCI's website says it will investigate Micromax's allegations that Ericsson is abusing its dominant position in the market, by charging "exorbitant royalty rates".
Micromax argues that Ericsson's mobile phone royalty rates should be based on the value of the technology used, rather than the end product's sale price, as the Swedish company is currently stipulating. Ericsson's method, Micromax argues, would make the royalty rate for smartphones significantly more than what the Indian manufacturer pays for feature phones.
(Written with PTI inputs)