Korea's FTC seeks concessions on Nokia-MS

Dylan Bushell-Embling
28 Aug 2014

South Korea's Fair Trade Commission plans to approve Microsoft's planned $7 billion acquisition of Nokia's handset business – but only with a condition designed to protect domestic handset vendors.

The FTC plans to hold a meeting next month to grant conditional approval, an official from the agency told the Korea Times.

The condition is that Microsoft must agree to put a cap on the royalties Samsung and other domestic handset vendors pay for Nokia patents.

According to the official, the agency feels it has no option but to order such a cap in order to protect Korean companies. Nokia would thus be advised to maintain its current royalty rates post-acquisition.

The FTC may also stipulate that Nokia must open up access to its standard essential patents and not consider taking any patent infringement action against local manufactures.

But the FTC's power to enforce these conditions is in doubt. The report notes that Microsoft does not need the regulator's approval to complete the transaction as Nokia has no manufacturing facilities there, and the Korean market accounts for less than 1% of Microsoft's annual revenue.

The FTC's decision follows a notice from China's Ministry of Commerce in April that it will approve the deal so long as the transaction will not mean higher royalty fees for the nation's own smartphone vendors.

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