Final Approval
The Korea Fair Trade Commission (FTC) gave final approval to the merger between Microsoft and Nokia. Instead of allowing Microsoft to acquire Nokia's cell phone business, it won't be possible for the company to increase and demand excessive patent fees to local smartphone vendors like Samsung Electronics and LG Electronics over the next 7 years.
On Aug. 24, the FTC announced that it finally approved the takeover of the Finnish company’s handset unit by the software giant, under the condition of a consent decision.
Microsoft is required to license its standard-essential patents (SEPs) for 3G and LTE that are applied to smartphones and tablets at fair rates, to lower fees for non-SEPs such as core technology related to Android operating systems, and to maintain those rates until 2022. In addition, the Redmond-based company won't be allowed to prohibit Korean handset makers from selling their phones, or to bring a lawsuit against them to ban imports of Korean phones on the grounds that those handsets infringe on its patents.
In particular, the country’s anti-trust regulator added issues related to areas where lawsuits involving tablet patents and a ban on the sales of mobile devices are restricted, which were taken from the existing plan submitted by Microsoft.
"Much more Korean handsets are exported to sell overseas than at home. So, we negotiated with Microsoft for a long time to widen sales areas so that the restrictions on sales bans can be applied to other countries," explained Park Jae-kyu, director general for market structure policy at the FTC.
However, no separate corrective measure was taken for Nokia, which is expected to become a Non-Practicing Entity (NPE), or a patent troll, after the M&A deal.
Hence, some in the industry point out that there are still remaining concerns about Nokia's patent abuse. In response, an official at the FTC said, "We decided that patent rights that Nokia will retain after the merger are excluded from our review of the merger under the law," adding, "After the M&A transaction, we are planning to continually monitor the possibility of Nokia's patent abuse."