The Competition Commission of India (CCI) is to investigate Swedish telecoms equipment maker Ericsson in regard to a dispute over charges levied on Indian group Micromax for the use of Ericsson's patents.
Ericsson had sued Micromax in March 2013 for patent infringement and the company responded by filing a complaint to the CCI, Ericsson said.
"The CCI has now decided to refer the case to the director general for an in-depth investigation," Ericsson said in a statement, adding it would fully cooperate with the probe.
According to a document on the CCI's website, it will investigate whether Ericsson charges Micromax too much in royalties to use its patents.
In its complaint to the commission, Micromax said Ericsson abused its dominant position in patents by imposing "exorbitant royalty rates," the document showed.
Micromax argued that royalties for Ericsson patents related to mobile phones should be based on the value of the technology used, not on the sale price of a phone.
The latter method makes royalties paid for smartphones much higher than standard phones.
Ericsson said it had tried several times to sign a license agreement with Micromax on fair, reasonable and non-discriminatory terms.