MICROSOFT CORPORATION & ANR (INFORMANT) VS. NOKIA CORPORATION (DEFENDA

Applicable Act: The Competition Act, 2002 (The Act)

BRIEF OF FACTS

• A notice was given pursuant to the Purchase Agreement dated 2nd September, 2013 entered into between the informant and defendant in relation to the proposed combination.
• The informant is a multinational software corporation headquartered in USA, and is primarily involved in the design, development and supply of computer software, hardware devices and related devices.
• The defendant is a multinational communications and information technology corporation, headquartered in Finland. It is active in the development and supply of mobile devices (smarphones as well as basic/feature phones) through its business division like Device and Services (D&S).
• The informant will acquire substantially the entire D&S business of the defendant. The defendant will grant the informant a ten year non-exclusive license to its patents, as at the time of closing, with an option to extend the same to perpetuity.
• The informant will grant the defendant reciprocal rights to use the patents of the informant in the services offered by HERE North America LLC, a subsidiary of the defendant. The informant will also become a strategic licensee of Nokia's HERE platform, as the defendant will grant the informant a four-year non-exclusive license to the HERE geospatial data and services.
• The informant would have a ten year license arrangement with the defendant to use the defendant brand on current and subsequently developed produces based on the Series 30 and Series 40 Operating System and that the defendant will continue to own and maintain the defendant brand. 

REASON

In India, the proposed combination relates to the mobile phone handsets (including the smartphones and tablets) business and the business related to the operating systems used in these devices. The notice filed by the informant stated that the proposed combination aimed to enhance the informant’s device business and strengthen opportunities for the informant and its developers across the defendant’s phone eco-system. It is the eco-system in this business which drives the demand between the users, application developers and designers/manufacturers.

As regards the proposed combination, it is noticed that in India, while the defendant is active in the D&S business of mobile handsets, the informant is not active in that business. As on the date of filing of the notice, both informant and defendant were also not active in the business of manufacturing and sale of tablets in India. As regards the operating software used in the mobile smartphones and tablets, it is noted that, in India, the defendant is not active in the said business.

There exists a vertical relationship between the two parties but the same is insignificant, taking into consideration the minimal share of the informant as well as the presence of major players in India and also given the minimal share of the defendant in the business of mobile phones and the presence of numerous other global and local players.

DECISION

Considering the above facts and the details provided in the notice, the Commission is of the opinion that the proposed combination is not likely to have appreciable adverse effect on competition in India and therefore, the Commission hereby approves the proposed combination under sub – section (1) of section 31 of the Act.