China more prudent than usual assessing Microsoft's Nokia acquisition

China more prudent than usual assessing Microsoft's Nokia acquisition

Summary: 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.

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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.

Topics: Patents, Microsoft, Nokia, China, The Microsoft-Nokia Deal

About

Loves caption contests, leisurely strolls along supermarket aisles and watching How It's Made. Ryan has covered finance, politics, tech and sports for TV, radio and print. He is also co-author of best seller "Profit from the Panic". Ryan is an editor at ZDNet's Asia/Singapore office.

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7 comments
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  • if china was prudent...

    ...she woudn't even think about it, she would just ban microsoft.
    deathtoms
    • Wow. In your zeal to critisize MS

      you didn't even stop to read that this issue is about Nokia.

      Incredible.
      William.Farrel
    • LoL

      Are you serious?
      Ram U
  • China wouldn't even be concerned if..

    China wouldn't even care if MS weren't a US company. They are executing the most people of any country in the world, yet they are worried about Microsoft's anti-trust violations? China should be on our blacklist, not the other way around.
    Tiggster79
  • China more prudent than usual assessing Microsoft's Nokia acquisition

    There really isn't anything to look over, just let the deal go through.
    Loverock.Davidson
  • Comical

    The notion that we need the China, the world capital of software piracy, to pass judgment on a merger between two great private companies would be humorous if it weren't so sad.
    FDanconia
  • Very Funny...

    Have to agree....
    This isn't about the rates that will be charged

    Its about a bunch of chinese vendors not wanting to pay.. "period"

    At some point China needs to grow up... They are a rapidly developing country
    and need to start acting in a responsible way.
    Most of the license holders have many years from now under existing licenses.
    so there is no change for many years to come.

    And really any limit would be China only and as we all know .... this stuff ends up in
    court for various countries and has nothing to do with China for the most part.
    whatsa2