- Samsung and Microsoft collaboration
- Anti-trust issues
- Samsung refused to share information
Samsung says Microsoft deal invites ‘charges of collusion’
While Microsoft was negotiating a deal to buy off Nokia, it was also getting into collaboration with Samsung for the Windows Phones. However, soon after Nokia’s acquisition was completed, Samsung and Microsoft were facing some trust issues as stated by a court filing which came on Thursday and takes its roots from Microsoft Corp’s (MSFT.O) lawsuit which accuses Samsung Electronics Co Ltd (005930.KS) of breaching a business collaboration agreement. This lawsuit was initially filed at the start of this year and it claims that Samsung still owes $6.9 million in interest on more than $1 billion in patent royalties it delayed paying.
However, Samsung has something else to be furious about and it says that it agreed in 2011 to pay Microsoft royalties in exchange for a patent license covering Samsung’s Android phones and the Android is made by Google Inc (GOOGL.O).as it appears, Samsung had also made an agreement to work on the Windows Phones and willingly shared confidential business information with Microsoft which was part of the coming together of the two companies.
The filing however has an interesting condition to it which says that Microsoft would reduce the royalty payments if Samsung met certain sales goals for Windows devices. This appears to be quite desperate on Microsoft’s part but we don’t blame them completely since the Windows phones have failed to take significant market share from iPhone maker Apple Inc (AAPL.O) and devices running on Android.
Acquiring Nokia was like becoming Samsung’s competitor rather than a partner; having owning Nokia, Microsoft directly became a hardware competitor for the South Korean mobile giant. After this, we can understand why Samsung refused to share any confidential information with Microsoft, which they now see as a competitor. Samsung claims that had they done so, they would have created some troubles with the U.S. antitrust laws. “[T]he agreements, now between competitors, invite charges of collusion.”
Microsoft has also been staying adamant on and issued a statement saying that they are “confident that our case is strong” and that it will succeed. Nokia’s acquisition by Microsoft on the other hand has been approved by the regulators in the United States and other countries.