Ericsson to Pay €80 Million after Settling Claim with Nokia

Scandinavian telecom gear makers Ericsson and Nokia have reached a damages claim settlement. As per the settlement claim, the latter will receive €80 million, Ericsson said on Wednesday.

Settlement Between Nokia and Ericsson

As per the statement released by Ericsson, the settlement followed investigations by the US Department of Justice (DoJ). The DoJ's investigation revealed corruption, and bribery.

In 2019, Ericsson settled with the DoJ and agreed to pay over $1 billion in penalties.

The DoJ earlier said that Ericsson admitted to conspiring with others to violate the Foreign Corrupt Practices Act from at least 2000 to 2016. The telecom equipment maker engaged in a scheme to pay bribes and to falsify books and records. Ericsson also failed to implement reasonable internal accounting controls.

As per the statement, Ericsson's EBIT will take a hit of 80 million euros. Furthermore, their cash flow will take a hit of 26 million euros in the second quarter.

Ericsson further said, "the amount reflects uncertainty, risk, expense, and potential distraction from business focus associated with a potentially lengthy and complex litigation".

The Swedish company added that the remainder of the settlement amount would be made in similar instalments in 2022 and 2023, impacting cash flow.

Nokia affirmed the information presented by Ericsson in the statement and offered no further comments.