After months of waiting, South Korea’s Fair Trade Commission (FTC) has finally approved Microsoft’s acquisition of Nokia after the number one software company accepted to not abuse its market domination position. The acceptance has come after FTC started questioning on the merger in February.
Local South Korean authorities have taken almost two years to review the issue since the acquisition of Nokia by Microsoft in 2013. During the initial review the government concludes that if Microsoft jumped into producing phones or gadgets through Nokia, it would form a competitive relationship with local smartphone makers like Samsung, LG and Pantech and may misuse its patents against them. FTC also accused that Microsoft was in business agreement with the local makers that could be used as an excuse to ‘share trade secrets.’
After Microsoft agreed not to use its SEP to get hold of patent licenses from other companies and outlined that even if it is sold to a third-party later, the company will ensure that new owners will not make any alterations in the existing licensing agreements conditions, FTC agreed to accept the acquisition.
Under the deal signed by FTC and Microsoft, Microsoft is not permitted to increase royalties unfairly against South Korean companies- SEP must be given in Fair, Reasonable and Non-Discriminatory (FRAND) terms. “In return for approving MS’s planned $7 billion acquisition of Nokia’s handset business, MS agreed to put a cap on the royalties Samsung and other local domestic handset firms pay for patents of the merged entity over the next seven years,” the FTC said in a statement. The agreement also mentions that MS should not file lawsuits against Korean handset manufacturers over patent infringement.
Microsoft’s activities would be under close watch by the regulators to ensure it follows the letter of agreement so as to better protect the rights of ordinary consumers and rival companies same.
South Korea was accused for its strict regulations against foreign companies but its denies saying that different countries have different set of laws and regulations. Microsoft declined to comment on the deal.