Taiwan’s FTC approves Microsoft/Nokia deal with provisos


The last hurdles to the deal between Microsoft and Nokia to purchase Nokia’s handset division are slowly falling away, as Taiwan’s FTC has confirmed its approval.

The agreement is however not without conditions.

The Taiwanese government has demanded that Nokia not raise its licensing fees for patents so as to force OEMs to choose Windows Phone over Android, and also that Nokia continues to license its standard-essential patents under FRAND conditions.

The Taiwanese FTC took input from Samsung and Google in February prior to making the decision, and I think we can see where the extra provisos came from.

At present the only hold out appears to be India, where the deal may go ahead without the transfer of Nokia’s Indian factories to Microsoft.  Nokia has continued to fight the Indian tax revenue service regarding their claims of tax evasion since 2006, but appears to be making little progress.

See the full (machine-translated) FTC statement after the break.

Fair Trade Commission News 103 years Feb. 19

Fair Trade Commission 1163rd Council Meeting by 103 years on February 19, on Microsoft Corporation (hereinafter referred to as Microsoft) and Nokia Corporation (hereinafter referred to as Nokia) combined case, because there was no significant change in the structure of the relevant market or impair competition, yet at fair Exchange Act Section 12 Paragraph 1 prohibits its binding necessary, but to ensure that the overall economic benefits outweigh the interests not restrict competition, Yuan Yi Fair Trade Law Article 12 paragraph 2 provides additional "Microsoft can not in the smart mobile Patents related devices authorized improper decisions or price discrimination, prejudice smart mobile device manufacturers are free to choose mobile operating system "," Nokia’s essential patents for authorization standards, should continue to comply with fair, reasonable and non-discriminatory (FRAND) principles. Nokia If standard essential patents make with his career, should ensure that the transferee undertaking the burden of compliance with the aforementioned two principles, "such as when authorization.

Microsoft and Nokia on September 2, 2013 entered into a share sale and purchase agreement with the assets, Microsoft proposed transferee Nokia devices and services business sector and the vast majority of business assets, including the division’s design team, working all production equipment, sales and marketing activity support functions, and new design patents in the sector producing products. Nokia Microsoft 10 years to be granted a non-exclusive patent license,Microsoft has been extended to the permanent authorization of the right to choose another Microsoft will provide another career department HERE Nokia business (digital maps and location-based services) of the reciprocal license. Microsoft and Nokia foregoing transactions HUD Fair Trading Act Paragraph 1 of Article 6, paragraph3, of the combined type, Microsoft’s Windows operating system in our PC operating system market share has reached the quarter, Microsoft and Nokia in the field of in the last fiscal year the amount of sales also reached a fair amount of sales will be combined with the announcement of the threshold should be declared, Ž? to combine career fair will be declared.

The fair will be in the course of a hearing, inquiry letter has a number of domestic manufacturers of mobile devices, industrial Ministry of Economic Affairs, Industrial Technology Research Institute and the Institute for Information Industry will present the case of a combination of advice, Google and Samsung were also made ??to related position statement. Another is to consult widely, in 103 years the fair will be on February 11 invited to participate in binding undertakings, domestic manufacturers of mobile devices, the relationship between people and experts, industry representatives held talks with the competent authorities.

FTC said, Microsoft and the related business combination for the development and licensing Windows Phone mobile operating system,Nokia is principally engaged in the manufacturing of mobile devices, it is a case series of vertical-type binding. Vertical integration by the FTC may assess the effect of restricting competition believes that the combination of Microsoft Windows Phone will be authorized to stop the possibility of downstream competitors in the market is low, because Windows Phone smartphone approximately 3.4% of the global market share, market share of only 2.2% in the domestic market, there is also launched by Google and the market share of nearly 80% of the Android system options, and Microsoft transferee purpose of Nokia devices and services, and Apple iOS system to become the market Google Android beyond the first three eco-system, so far as possible the need to expand the installed base of Windows Phone, Microsoft Windows Phone authorize the use of stop to the possibility of other ways to block mobile device manufacturers downstream competitors is not high.

Another front in the Android system because Microsoft has involved a number of patents by Microsoft, one after another with the Android system using mobile device manufacturers signed "Android licensing program" since 2010, and receive royalties based on the number of Android mobile devices, there are a number of mobile device manufacturers, said Microsoft could improve upon binding "Android licensing program" royalties to elevate the cost of mobile device manufacturers to use the Android system. After the fair will be assessed that the combination means Microsoft will have its own manufacturing sector, will reduce the dependence on manufacturers of other mobile devices to improve the "Android licensing program" does have the right incentive payments, on the one hand to attract mobile device manufacturers to abandon Android System switch to Windows Phone, narrowing the gap with the other two on the ecosystem scale; while increasing the system has decided to adopt Android device manufacturers royalty expenses, in order to achieve the purpose of the booster downstream competitors costs. Therefore, the decision to combine the fair will approach requires additional burden associated with Microsoft shall not smart mobile devices as inappropriate licensing decisions or price discrimination, prejudice smart mobile device manufacturers are free to choose mobile operating system.

In addition, Nokia will allow mobile devices and services with Microsoft after the mobile device will change the original patent license balanced market situation. Due to the combination of Nokia mobile devices still retains the main patent, but does not engage in the manufacturing of mobile devices, due to their products without fear of being counter-infringement of patents, nor the need to interact with the mobile device vendor authorization, it is possible for Nokia to use its standard mobile device manufacturers need to improve patent royalties received, thus increasing production costs and the price of mobile devices, and which is also part of the scope of restrictions caused by a combination of competition does not interest. Therefore, the decision to combine the fair will approach requires additional burden Nokia standard essential patents for authorization, shall continue to comply with fair, reasonable and non-discriminatory (FRAND) principles. If Nokia standard essential patents let his career, should ensure compliance with the principles of the transferee undertaking in the preceding authorization.

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