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China to block Microsoft-Nokia deal if patent fees are not lowered, sources say

News   •   Dec 29, 2013 07:15 GMT

China’s Ministry of Commerce could block the deal between Microsoft and Nokia if the two do not agree to lower their patent fees.

According to DigiTimes, “China's Ministry of Commerce is reviewing Microsoft's planned acquisition of Nokia's Devices and Services Unit for possible violations of its antitrust laws, and may take the opportunity to require Microsoft and Nokia lower their licensing fees, according to sources in Taiwan's handset supply chain.

“China delayed the approval of Google's acquisition of Motorola for several months, and the company committed to maintaining its free licensing model for Android after the planned acquisition, the sources noted.”

The site adds, “Nokia had been reluctant to file complaints against China-based handset vendors while it was still selling handsets in China. But Nokia may leverage its patents to seek license fees from China's handset suppliers after selling its hardware business to Microsoft, the sources commented.

“With their rising visibility globally, China-based handset vendors are likely to face complaints from Nokia, and therefore they would like the commerce ministry to take actions to force Microsoft and Nokia to make concessions before the approval of the acquisition, said the sources.”

Will Microsoft and Nokia give in to China’s Ministry of Commerce’s demands? Share your thoughts through a comment below.