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Samsung Says Microsoft Deal Invites 'Charges of Collusion'

Samsung Says Microsoft Deal Invites 'Charges of Collusion'

By Reuters | Updated: 1 November 2014 10:24 IST

Samsung said its collaboration with Microsoft on Windows phones raised antitrust problems once Microsoft completed its acquisition of Nokia's handset business, according to a court filing.

The filing late on Thursday stems from Microsoft Corp's lawsuit accusing Samsung Electronics Co Ltd of breaching a business collaboration agreement. The lawsuit, filed earlier this year in a New York federal court, says South Korean smartphone company Samsung still owes $6.9 million in interest on more than $1 billion in patent royalties it delayed paying.

Samsung, meanwhile, said the April Nokia acquisition violated its 2011 deal with Microsoft.

In a court filing late on Thursday, Samsung said it agreed in 2011 to pay Microsoft royalties in exchange for a patent license covering Samsung's Android phones. The Android operating system is developed by Google Inc .

However, Samsung also agreed to develop Windows phones and share confidential business information with Microsoft as part of that collaboration. Microsoft would reduce the royalty payments if Samsung met certain sales goals for Windows devices, the filing said.

Microsoft's Windows phones have failed to take significant market share from iPhone maker Apple Inc and devices running on Android.

Once Microsoft acquired Nokia, it became a direct hardware competitor with Samsung, the filing said, and the South Korean company refused to continue sharing some sensitive information. Doing so could have created problems with U.S. antitrust laws, Samsung said.

"[T]he agreements, now between competitors, invite charges of collusion," Samsung said in the filing.

In a statement, Microsoft said it was "confident that our case is strong" and that it will succeed.

Antitrust regulators in the United States and other countries have approved Microsoft's Nokia acquisition.

The lawsuit in U.S. District Court, Southern District of New York is Microsoft Corp vs. Samsung Electronics Co Ltd, 14-6039.

© Thomson Reuters 2014

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