European Commission clears Microsoft's Nokia purchase

European Commission clears Microsoft's Nokia purchase

Summary: The EU has approved Microsoft's planned purchase of Nokia's mobile devices and services business.

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The European Commission has given Microsoft's planned acquisition of Nokia's mobile device business the green light.

EUapprovesmsnokia

In a press release dated December 4, the Commission said it had investigated potential compeition concerns and found none.

"The Commission concluded that the transaction would not raise any competition concerns, in particular because there are only modest overlaps between the parties' activities and the links between Microsoft's mobile operating systems, mobile applications and enterprise mail server software with Nokia's smart mobile devices are unlikely to lead to competitors being shut out from the market," said the press release.

"In 2012, almost 700 million smartphones and 162 million tablets were sold worldwide. The Commission assessed the effects of the acquisition on competition in the field of smart mobile devices (including smartphones and tablets). The Commission found that the overlap of the two companies' activities in this area is minimal and several strong rivals, such as Samsung and Apple will continue to compete with the merged entity," the release added.

The Commission investigated a number of the "vertical relationships" between a combined Microsoft-Nokia in the smart mobile device and mobile operating system, applications, enterprise mail server software and related communications protocols. They seemingly found no cause for alarm, as Microsoft's market share in the mobile OS space is "limited." Microsoft is expected to need to continue to rely on third party device suppliers to compete with Android and Apple's platform, the Commission said.

"Microsoft is unlikely to restrict the supply of its mobile apps, such as its Office suite apps and its communication app Skype, to competing providers of smart mobile devices," the Commission added. "Since Office apps are currently not available on tablets running third party OSs, a potential supply restriction would be limited to other tablet suppliers using Microsoft's Windows OSs. However, this strategy would hamper Microsoft's interest to attract more app developers and ultimately users to its OSs for smart mobile devices. For smartphones, the share of Office apps is minimal and there are many popular competing apps. Similarly, with regard to Skype, other popular apps continue to be available. Moreover, given the low market share of Windows in mobile OSs, limiting interoperability with third-party mobile OSs would ultimately weaken Skype's competitive offering."

The Commision also found that Microsoft wouldn't be able to restrict the interoperability of competing smart mobile devices with Exchange Server "because of the contractual terms of their current licenses to Microsoft patents covering the communication protocol that manages synchronisation of email, calendar and contacts between smart mobile devices and Microsoft Exchange."

"The Commission considers that any possible competition concerns, which might arise from the conduct of Nokia, following the transaction, in the licensing of the patent portfolio for smart mobile devices which it has retained falls outside the scope of the EU Merger Regulation," the release noted.

"We look forward to the date when our partners at Nokia will become members of the Microsoft family, and are pleased that the European Commission has cleared the deal without conditions," said a Microsoft spokesperson.

Earlier this week, the U.S. Department of Justice gave its approval to the pending Microsoft-Nokia acquisition.

Microsoft went public with plans to buy Nokia's devices and services business, plus license a number of its patents, for $7.2 billion in September. Microsoft officials have said they expect the transaction to be completed around the first quarter of 2014.

Topics: Mobile OS, Legal, Microsoft, Nokia, Windows Phone

About

Mary Jo has covered the tech industry for 30 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

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11 comments
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  • European Commission clears Microsoft's Nokia purchase

    Well, it's a done deal if the EU approved and the U.S. DOJ approved. Oh wait, I forgot about the angry MSFT Stockholders. They are just angry because Steve Ballmer did it. He's done more for that company than he's given credit for. MSFT has mounds of cash. Heck, they could buy Canada.
    darkurious
    • what?

      I hardly think the MSFT shareholders are angry, the stock hasn't been higher in over 10 years. This is a happy day IMO.
      ClickHouse
  • @Mary Jo

    Do you have any insider information about the rumored Surface Phone rumored before Nokia acquisition? I am thinking eventually there will be, because, they have acquired fully talented devices arm and they will continue Lumia and Surface side by side keeping Lumia for entry level to mid level or high mid level (with Photography and video intact) and Surface for high level basing enterprises.
    Ram U
  • Now what?!

    Now that they have regulatory approval can they begin discussing details of the merger?
    uberlaff
    • Now what?!

      Most of the details were discussed before the proposal of the merger. Trust me, with deals as such, the details had to be an advantage to both organizational parties. The only thing that should be discussed is tax.
      darkurious
  • European Commission clears Microsoft's Nokia purchase

    I hope Microsoft keeps the Nokia engineers since they are providing more innovation to cell phones and the added benefit of that innovation being Microsoft exclusive. Going to the Microsoft store will be a lot more fun.
    Loverock.Davidson
  • Merger!

    PennCentral Railroad!
    Tony Burzio
  • the corrup bureaucrats from EC did it again!

    They approved this anticompetitive deal and are harassing google!
    LlNUX Geek
  • @Linux Geek

    I would love to hear your explanation of how this is an anti-competitive deal and how they are harassing Google?
    Gary O'Connor
  • Great now watch Microsoft F*** it up

    Nokia branded Lumia phones were doing great in Europe. Now Microsoft has taken over, and the talented Nokia Engineers drift away, the Windows Phone platform will die.

    Windows Phone was great whilst [Nokia Lumia] lasted, now lets all watch it go the way of Skype etc.
    JulesVerny
    • Sounds like a rousing success, if they become as successful as Skype is

      right now.

      People, btw, don't care who makes their devices, as long as they perform as expected and with the features they expect. Only Apple fanatics care that a device has the Apple logo on it, and that it carries a premium price. Otherwise, brand loyalty is not something that most people worry about. Give them a good price, good looking devices, with good enough features, and an adequate cell-plan, and Bingo!, happiness happens.
      adornoe