Microsoft to cut royalties for LG, Samsung, other Korean made Android phones

Microsoft has come to an agreement with Korea’s Fair Trade Commission to lower royalties on patents it holds on technologies in Android devices, affecting two of the world’s largest handset makers, LG and Samsung.  The company agreed to put a cap on royalties for seven years, and agree to not sue Korean based companies, in return for Korean regulatory approval of its acquisition of Nokia’s phones businesses.

The Korean FTC also required Microsoft to scrap a business collaboration agreement where Microsoft would share confidential information with its rivals, in order to “protect the rights of consumers” according to a statement released by the Fair Trade Commission and reported by the Korea Times (via WMPU).

Microsoft has been using patents it holds related to Android devices to charge device makers for any Android handsets they make, and this agreement will require the company to cap not only Fair, Reasonable and Non Discrimanatory (FRAND) patents, but also on Standard Essential Patents (SEP), that is, patents that are core to the Android operating system and cannot be replaced.

The agreement allows Microsoft to move forward in Korea as it uses what’s left of the Nokia acquisition to market new phones, and in return gains concessions for Korean phone manufacturers using the Android operating system.

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