Ericsson has finally been freed of shackles imposed by the U.S. Department of Justice (DOJ) tied to a 17-year-long bribery scandal involving high-ranking government officials, the falsification of financial documents by the telecommunications equipment vendor and the possibility that funds were diverted to a terrorist organization.

The Sweden-based telecommunication equipment giant announced the end of “the work and term” of an independent compliance monitor appointed by the DOJ that began in 2020, and the expiration of a follow-on “plea agreement” that was linked to Ericsson failing to comply with initial terms of a deferred prosecution deal.

“This is an important milestone in our journey to improve our organization,” Ericsson CEO Börje Ekholm noted in a statement. “Over the past four years we have implemented important compliance requirements and processes. Our commitment to integrity is rock solid and we have no tolerance for corruption, fraud or other misconduct.”

Ericsson’s conduct ‘hugely embarrassing’ Ericsson has been operating under an compliance program since mid-2020 as part of a $1.06 billion settlement the previous year with the DOJ. That settlement came after a six-year investigation by the DOJ and Securities and Exchange Commission (SEC) that found Ericsson had bribed government officials in six countries and filed false financial records.

Ericsson at that time claimed the criminal activities ended in the first quarter of 2017 and it fired 50 people in 2018 following an internal investigation. Current Verizon CEO Hans Vestberg led Ericsson between 2010 and mid-2016 — or six months prior to when these activities were alleged to have stopped — when he abruptly resigned following several underperforming quarters. Vestberg was at Ericsson for 19 years and replaced by current Ericsson CEO Börje Ekholm.

Ericsson violated that initial agreement in 2022 when it admitted to multiple incidents of bribery and corruption in Iraq between 2011 and 2018. Most damning of all, the company at that time said it couldn’t unequivocally deny that bribes paid by some employees during that period ended up in the hands of the Islamic State terrorist group.

Ekholm at that time admitted to a continued pattern of “hugely embarrassing” and “unacceptable misconduct” from the vendor.

“There are parts that can be substantiated and there are parts that cannot be substantiated. And the question on financing armed factions cannot be substantiated,” Ekholm said during a press conference with journalists and financial analysts at that time.

That admission resulted in a new investigation by the SEC. Ericsson early last year pled guilty to charges that it failed to provide information related to a previous settlement with the DOJ and SEC, and agreed to pay an additional $206 million in fines.

Ericsson sees opportunities

Despite the “unacceptable misconduct,” Ericsson has maintained its position as one of the market’s largest equipment vendors.

Dell’Oro Group recently ranked Ericsson as one of the largest radio access network (RAN) vendors during the first quarter despite an overall slowing of the market. Ericsson also was tapped by AT&T to shepherd a $14 billion open RAN initiative, which is expected to help drive both that market and Ericsson’s position in the space.

“It’s generating a lot of discussions in the market and basically with all customers that this is … a bit of an industry shaping type of contract where the customer, in this case, looks at the total opex envelope and the total capex envelope and tried to optimize the investments in revenue-generating equipment,” Ekholm recently said of the deal.

“When they look at this, this is starting to drive a similar discussion in many customer interactions. We saw that in Mobile World Congress just a few months ago at the end of February, where this was one of the key discussion items with a number of customers and we’ll see how we can deliver on that going forward. But it puts us in a very interesting position of very interesting discussions with customers,” Ekholm said.