Microsoft has been trying very hard to get Nokia's hardware business into its fold. However, Chinese watchdogs have other ideas.
While the Chinese Ministry of Commerce typically approves such acquisitions following an initial 30-day investigation period, the approval of the Microsoft-Nokia deal has just gone into extra time with a second investigation being launched.
The Microsoft-Nokia deal has already been approved in other key territories such as Europe and North America. In China, however, concerns about antitrust violations have stalled the deal. While it is certain that the second probe on the deal is already under way, the Chinese Ministry of Commerce prefers to keep silent about its outcome.
This begs a question - why does the Chinese government want a second look at the deal? According to market observers, it could be because many small Chinese mobile phone manufacturers are concerned that a Microsoft-Nokia deal would possibly mean imposition of higher patent fees for utilizing the technologies currently owned by Nokia. Once Microsoft completes the purchase, it will take control of Nokia's mobile phone business, and that naturally has companies like Lenovo and ZTE concerned about the deal. Once Nokia loses its hardware division, the company may hike licensing fees to stay afloat.
In the past, Nokia has adopted a forgiving stance when it came to other companies using technologies that it owns. This may change, however, as soon as the Microsoft-Nokia deal is complete. "Once we no longer have our own mobile devices business, following the close of the [Microsoft] transaction, we would be able to explore licensing some of those technologies," Nokia spokesman Mark Durrant said.
Nokia was once the global leader in the mobile phone industry. However, aggressive encroachments by companies like Google, Apple and Samsung have stripped the company of its former glory. To keep its business afloat, it makes sense for Nokia to take advantage of their varied patent portfolio to make a profit. However, watchdogs from all over the world would be keeping a close eye on the company.
Shares of Microsoft fell 0.40 percent to close down at $37.29 on the Nasdaq on Friday.
