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http://www.businessweek.com/news/2014-03-03/google-samsung-said-to-express-microsoft-nokia-concern-to-china

Bloomberg News

Google, Samsung Said to Express Microsoft-Nokia Concern to China

March 03, 2014

Google Inc. (GOOG:US) and Samsung Electronics Co. (005930) joined Chinese mobile phone makers in expressing concern to China that Microsoft Corp. (MSFT:US)’s bid to take over Nokia Oyj (NOK1V)’s phone business may result in higher patent licensing fees, two government officials familiar with the matter said.

Google and Samsung asked China’s Ministry of Commerce to make sure that the 5.44 billion euro ($7.5 billion) bid doesn’t result in higher fees on wireless technology patents that will remain with Nokia, the two officials said, asking not to be identified because the request wasn’t made public. They’re also concerned Microsoft will gain more power over the smartphone market and may abuse its patents, according to the people.

The two companies join domestic vendors including Huawei Technologies Co. and ZTE Corp. that asked China’s regulators to set conditions on the deal, according to the officials. Microsoft and Nokia announced the deal in September after the Finnish company lost ground in the smartphone market to Apple Inc. (AAPL:US)’s iPhone and devices running Google’s Android platform.

Under the deal, Microsoft is buying the hardware business while leaving most of the wireless patents in Nokia’s control. Microsoft won European Union approval for the bid on Dec. 4, while regulators said they would monitor Nokia’s licensing practices after the close of the transaction.

China’s Ministry of Commerce is conducting an anti-monopoly review and is likely to approve the deal, the officials said. The question is whether the ministry will demand the companies guarantee that the agreement doesn’t result in higher patent fees, the officials said.

Ministry Review

Google spokesman Taj Meadows and Samsung spokeswoman Jini Park declined to comment on whether their companies had raised any such concerns with regulators in China. Two phone calls today to the press office of the Ministry of Commerce in Beijing went unanswered.

“This merger application is currently under MOFCOM’s review and we have no further comment,” Joanna Li, a Beijing-based spokeswoman for Microsoft, said in an e-mail today.

ZTE Corp. (763) plans to add Windows Phone devices to its offerings, Microsoft said last month. Samsung Electronics Co. and Huawei Technologies Co. already make Windows phones.

The portion of mobile phones running Windows is projected to almost double to 7 percent in 2018, from 3.9 percent this year, Framingham, Massachusetts-based market researcher International Data Corp. reported in February. The share running Google’s Android system will drop to 76 percent, from 78.9 percent in the same period, IDC reported.

To contact Bloomberg News staff for this story: Steven Yang in Beijing at kyang74@bloomberg.net; Edmond Lococo in Beijing at elococo@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net


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