Photo: AFP

Chinese authorities have opened an anti-trust investigation into telecommunications equipment maker Ericsson, as the Swedish firm readies for competition with Chinese giant Huawei in the race to win 5G contracts.

According to Chinese state media, the country’s top anti-trust regulator conducted a raid on Ericsson’s Beijing office as part of the probe, which centers around complaints from mobile phone makers about 3G and 4G licensing.

Allegations of anti-competitive practices in the telecommunications sphere are not new to China, and the issue of foreign firms abusing market dominance came to the fore in 2013 with a high-profile case involving Qualcomm. The US firm was accused of charging unreasonably high licensing fees and subsequently forced to pay a US$1 billion fine.

That previous case and the current investigation into Ericsson focus on patents for third and fourth-generation wireless network technology, patents for which were already largely dominated by foreign firms as Chinese players came to the table.

But the new investigation comes amid the advent of 5G networks, a development that has seen Chinese giants Huawei and ZTE charge out of the gate early.

Huawei is already seen as ahead of the game in terms of patents for the next-generation wireless technology. Ericsson is one of the few non-Chinese rivals in certain areas of 5G.

The European firm could benefit from a US campaign to get allies to block Huawei equipment, but reports have indicated that the firm has been careful not to be seen as endorsing Washington’s efforts, for fear of facing retaliation in the Chinese market.

Ericsson earns a sizable chunk of its revenue, around 7%, from its business in China.

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