Microsoft/Nokia Deal Raises Concerns Over Higher Patent Licensing Fees

March 3, 2014 - Written By Justin Diaz

While the Microsoft/Nokia Deal may seem all well and good, not everyone is letting the notion of this deal pass through their minds without concern though. Google, Samsung, Huawei, and ZTE(makers of the Nubia series of smartphones, and rumored Nubia Z7/X6) are all apparently concerned that Microsoft’s acquisition of Nokia’s hardware division is going to lead to higher licensing fees for patents. The main concern is that the deal between both companies will ultimately lead to fees related to wireless technologies patents seeing an increase. Wireless tech patents are scooped up in droves by larger companies all the time, and lawsuits over patents often set the stage for huge, long drawn out battles in court, so it’s no surprise to see companies like Google and Samsung showing concern, who have both had their fare share of run ins with Microsoft.

Among the worry that other larger tech companies and hardware manufacturers could see higher patent licensing fees, there is a rising concern that Microsoft could end up taking advantage of it’s newly updated patent portfolio. A boost in the smartphone market wouldn’t necessarily be the worst thing for Microsoft, but Chinese Government officials along with the aforementioned companies above are more concerned with what Microsoft would do to stifle its competition if they gain more marketshare due to this deal. Google and Samsung who are major players in the smartphone market currently, have reportedly asked the Chinese Ministry of Commerce to make certain that the deal between Microsoft and Nokia would not cause patent licensing fees to rise. Although these concerns are not necessarily unfounded, as Microsoft is known for gouging with patent licensing fees where they can and they already collect license fees on 50% of Android powered handsets, their newly acquired division(Nokia) will be under heavy watch from the European Union, as the EU will be observing the way Nokia handles Licensing issues going forward.

A handful of regional regulators have already signed off to allow the sale of Nokia’s handset division to go through, among them are Russia, the U.S., Turkey, Europe, Israel. Also on the list of countries to sign off on the deal was India, where Microsoft gets a hefty multi-billion dollar revenue each quarter. It’s likely that some of the requests from Google, Samsung are being take into consideration with the Chinese Ministry of Commerce before their decision is made. Although China is not the only region that has yet to sign off on the acquisition, it seems likely to pass and what happens after that will just have to play out.