Microsoft Corporation (MSFT) May Face Chinese Review Over Patent Fees

Chinese Mobile companies including Huawei Technologies Co and ZTE Corp has urged China’s Ministry of Commerce to ensure that Microsoft Corporation (NASDAQ:MSFT) does not increase the patent licensing fees after acquiring Nokia’s Device business.

Regulators would review the matter

Both companies asked the regulators to take proper steps to keep the licensing fees on wireless technologies at the same level after the deal concludes, says a report Economic Times citing two sources familiar to the matter. The ministry is conducting an anti-monopoly review of the deal.

The news of Microsoft Corporation (NASDAQ:MSFT) acquiring Finnish handset maker broke out, in September last year as both companies lagged to catch up with the speed of Apple Inc. (NASDAQ:AAPL) iPhones and devices powered by Google’s Android platform. In December, 2013, Microsoft was granted permission by European Union to complete the deal.

David Dai, a spokesman for Shenzhen-based ZTE, turned down the request to comment. Huang Man, a Shenzhen-based spokeswoman for Huawei, and Joanna Li, a Beijing-based spokeswoman for Microsoft, said they didn’t immediately have information available on the matter.

The European Commission “will remain vigilant and closely monitor Nokia’s post merger licensing practices under EU antitrust rules”, the commission said in a statement while it approved the deal.

Last year, Google Inc (NASDAQ:GOOG) lodged a complaint against Microsoft and Nokia accusing the companies of using the patents to foil the competition.

Chinese smartphone makers among top players

Huawei, as well as, ZTE make smartphones on Android and Windows platform. At the time, when Microsoft Corporation (NASDAQ:MSFT) announced the acquisition of Nokia handset business, both companies said they would continue making Windows based phones.

According to a report from IDC, Apple and Samsung are two most dominating smart phone companies in the world whereas four of the Chinese smart phone companies are amongst the seven top producers worldwide. Smartphone juggernaut Samsung clinched 31% share of the market in the third quarter compared to Apple, which garnered 13%. According to IDC, Huawei was on the third spot with 4.8% share and Lenovo took the fourth spot with 4.7% of shares. South Korean Electronics giant LG Electronics Inc was at fifth place followed by Chinese makers Coolpad brand of China Wireless Technologies Ltd. and then ZTE.