14 DAY TRIAL // Microsoft and Samsung have had a very difficult relationship throughout the years, which included various lawsuits over patents.
But these problems will apparently finally come to an end, as the Redmond giant has agreed to cut royalties it collects from Korean tech giants such as Samsung or LG Electronics and follow strict FRAND guidelines (fair, reasonable and non-discriminatory), even for non-Standard-Essential Patents, in a deal brokered by the Korean Fair Trade Commission (FTC).
According to Business Korea, the deal is a by-product of anti-trust actions related to the ill-fated Nokia acquisition. Moreover, some of the patents owned by Microsoft are considered to be core technology for Android software, which can’t be replaced.
“In return for approving MS’s panned $7 billion acquisition of Nokia’s handset business, MS agreed to put a cap on the royalties Samsung and other local domestic handset firms pay for patents of the merged entity over the next seven years,” the FTC said.
Microsoft loosens up
Furthermore, the deal also implies Microsoft changing a little bit the way it does business. The FTC ordered the Redmond company not to make exclusive deals with individual Korean companies.
These rules might prevent Microsoft from engaging in hardcore negotiations with prospective partners or to leverage Windows Phone handsets from OEMs in return for reduced royalties.
On the other hand, Microsoft could be willing to abandon these aggressive strategies on its own, in favor of more amicable ways of doing business with its OEMs.
You might remember that, a few months ago, Microsoft agreed to drop the patent dispute it had with Samsung if the Korean tech giant agreed to promote Redmond’s services on its handsets.
That’s why the Galaxy S6 and Galaxy S6 edge come with a suite of Microsoft apps pre-installed, including OneNote, OneDrive and Skype. More products like those should be making a debut into the wild soon enough.
Back in 2013, Samsung had to pay 1 trillion Won ($925 / €822 billion) to Microsoft, a figure which translates into $2.7 / €2.4 for each phone or tablet. So it’s easy to see how Samsung would really welcome a discount.