“Microsoft-Nokia deal clears European regulatory hurdle” reported MobileWorld Live, the official publication of GSMA the Assosiation of GSMA on 2013-12-05 00:00:00.
The European Commission (EC) cleared Microsoft’s €5.4 billion acquisition of Nokia’s Devices and Services business, following the approval of the deal by US regulators earlier in the week.
The Commission concluded that the transaction did not raise any competition concerns as there are only “modest overlaps” in the activities of the companies.
In addition, “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”.
The Commission also found that strong rivals, such as Samsung and Apple, “will continue to compete with the merged entity”.
The US Department of Justice and Federal Trade Commission (FTC) both approved the deal at the beginning of the week, with the FTC granting early termination on the deal. Nokia shareholders strongly approved the deal at a company EGM in November.
Nokia told Mobile World Live that “more than half of the regulatory approvals required have already been received”, with Brazil, Canada, India, Israel, Russia, Turkey, Ukraine, also passing the deal.
“Only six further countries including China need to approve the transaction before it can close, which we continue to anticipate to be in the first quarter of 2014, subject to these approvals and other closing conditions,” Nokia said in a statement.
The EC judged it unlikely that Microsoft will deny the use of Windows Phone by third party device manufacturers following the acquisition of Nokia. This is partly due to Microsoft’s reliance on third party vendors to increase the limited market share of Windows Phone and attract app developers to the OS.
Microsoft is also unlikely to restrict the supply of its apps, which include Skype and its Office portfolio, to other mobile vendors as it would go against its aim to attract more developers. Restricting Skype to the Microsoft platform was also judged unlikely as it would weaken the product.
Additionally, Microsoft would not be able to restrict interoperability of smart devices using other operating systems with Exchange Server, its enterprise mail server software, due to the contractual terms of current licences.
The Commission statement noted that any competition concerns connected to Nokia’s conduct around its mobile patent portfolio after the transaction has taken place fall outside the EU Merger Regulation. As such these concerns can’t be taken account of when looking at the Microsoft-Nokia deal.
However, the Commission said it “will remain vigilant and closely monitor Nokia’s post-merger licensing practices under EU antitrust rules”.
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