Special Feature
Part of a ZDNet Special Feature: The Microsoft-Nokia Deal

China more prudent than usual assessing Microsoft's Nokia acquisition

The deal is undergoing a second-phase anti-trust probe by China's commerce watchdog, which is taking longer than the usual 30 days, reportedly due to concerns from domestic handset makers over a potential Nokia licensing fee hikes.

Microsoft's proposed acquisition of Nokia's devices business appears to be getting more due diligence than usual for approval by Chinese authorities.

Such deals typically get approved by China's Ministry of Commerce after a 30-day first phase investigation, but it is currently undergoing a second phase probe, according to The Economic Observer. The deal has already been given the green light in other countries, including the United States and Europe.

According to the news agency's sources, the extra prudence by the ministry stemmed mainly from requests from domestic phonemakers such as ZTE, Lenovo and Xiaomi, who are worried the completion of the deal could lead to higher patent fees by Nokia for its handset technology and tighter enforcement.

Nokia has adopted a loose system for patent protection in China, charging only a few of the country's phonemakers, noted Economic Observer. The patent fees account for about 2 percent of a device's selling price, it added.

Earlier this month, Europe's competition commission issued a light warning to Nokia that it would investigate if there were signs of the company abusing its trove of mobile patents.

In September, Microsoft anounced plans to acquire Nokia's phone-making unit for about US$7.2 billion. The deal would allow Nokia to retain its patent portfolio , which it could turn to for a revenue boost.


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