Microsoft Corporation v Nokia Corporation, in particular the Devices and Services Business of Nokia Corporation (018085) [2014] ZACT 41; [2014] 1 CPLR 113 (CT) (14 March 2014)

Microsoft Corporation v Nokia Corporation, in particular the Devices and Services Business of Nokia Corporation (018085) [2014] ZACT 41; [2014] 1 CPLR 113 (CT) (14 March 2014)

The Tribunal found that the proposed transaction would not result in a substantial lessening or prevention of competition in the relevant South African markets. There was no horizontal overlap, and the vertical relationships created by the merger were unlikely to result in input or customer foreclosure, given the low market shares of the parties and the presence of strong competitors. The patent licensing arrangement did not foreclose competitors, as Microsoft would acquire only design patents and non-exclusive licenses, with Nokia continuing to offer licenses to third parties. The Tribunal also found no public interest concerns, as no retrenchments were planned. Accordingly, the merger...

Citation
[2014] ZACT 41
Parties
Applicant: Microsoft Corporation; Respondent: Nokia Corporation, in particular the Devices and Services Business of Nokia Corporation
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
14 March 2014
Case Number
018085
Procedural Posture
Merger Control / Approval of Merger Transaction
Outcome
Merger approved without conditions.
Judges
Takalani Madima, Medi Mokuena, Anton Roskam
Legal Topics
Merger Control, Vertical Relationships, Input Foreclosure, Customer Foreclosure, Patent Licensing, Public Interest
Competition Law Commercial and Corporate Merger Control Vertical Relationships Input Foreclosure Customer Foreclosure Patent Licensing Public Interest

Case Brief

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Parties

Microsoft Corporation

Applicant

Nokia Corporation, in particular the Devices and Services Business of Nokia Corporation

Respondent

Procedural Posture

Merger Control / Approval of Merger Transaction

Legal Issues

  1. 1 Whether the proposed acquisition will result in a substantial lessening or prevention of competition in the relevant markets.
  2. 2 Whether the transaction will result in input or customer foreclosure in the supply of operating systems, apps, communication services, and email services for smartphones and tablets.
  3. 3 Whether the patent licensing arrangement will foreclose competitors from accessing essential patents.

Ratio Decidendi

The Tribunal found that the proposed transaction would not result in a substantial lessening or prevention of competition in the relevant South African markets. There was no horizontal overlap, and the vertical relationships created by the merger were unlikely to result in input or customer foreclosure, given the low market shares of the parties and the presence of strong competitors. The patent licensing arrangement did not foreclose competitors, as Microsoft would acquire only design patents and non-exclusive licenses, with Nokia continuing to offer licenses to third parties. The Tribunal also found no public interest concerns, as no retrenchments were planned. Accordingly, the merger...

Court Disposition

Merger approved without conditions.

Orders

  • The proposed transaction is approved.
  • No conditions are imposed on the approval.