The payment relates to a US Department of Justice ruling in 2019 which found Ericsson broke the Foreign Corrupt Practices Act.
Sweden’s Ericsson reached an agreement with Finnish rival Nokia to pay a total settlement of €80 million in three similar instalments, in Q2 2021, then 2022 and 2023.
Ericsson said this would impact operating profit (EBIT) by €80 million and cashflow by €26 million in the second quarter.
“The amount reflects uncertainty, risk, expense, and potential distraction from business focus associated with a potentially lengthy and complex litigation,” it said in a statement.
Investigations
The payments are the result of investigations by the US Department of Justice (DoJ) and the US Securities and Exchanges Commission into corruption, including bribing government officials. Ericsson settled with the DoJ in 2019 and agreed to pay over $1 billion in penalties.
The DoJ said that Ericsson admitted to conspiring with others to violate the Foreign Corrupt Practices Act from at least 2000 to 2016, including a scheme to pay bribes, to falsify books and records, and by not implementing reasonable internal accounting controls.
The charges covered five countries including Djibouti.
Earlier this week Ericsson announced the end of a legal battle with rival Samsung concerning patents in the US and several other geographies.