The European Commission unconditionally cleared the proposed purchase of Nokia’s smartphone arm by Microsoft. It decided that the overlap between activities of these two companies is relatively small and that the transaction is unlikely to lead to reduction of competition on the smartphone market. It also noted that even after the merger there will be still a number of other major competitors left, including Samsung and Apple. More details could be found in the Commission press release here.
It is ironic that the Commission pointed out that Microsoft’s position on the mobile operating systems market and on the smart mobile devices market is limited and that the merger is unlikely is to change it. In the competition practitioners’ community Microsoft is most known for its lengthy dispute with (yes you guessed it) the Commission concerning abuse of dominant position on the desktop PC operating system market which resulted in record-breaking fine. It also opened up a discussion whether the competition law should trump the intellectual property rights (which is a topic for another post).
Another point to note is that the Commission did not address any concerns relating to Nokia’s portfolio of standard essential patents (SEPs), as they fall outside the scope of the merger review. However it will closely monitor Nokia’s licensing activities following the merger to ensure that it complies with the provisions prohibiting abuse of dominant position – the very same ones which Microsoft breached few years ago. The Commission is currently very active in the SEP area and in 2012 it initiated proceedings against Samsung and Motorola. Watch this space to stay tuned.