Some in and around the IP community have criticized the Microsoft (MSFT)/Nokia (NOK) transaction as anticompetitive. For example, David Balto, a former policy director of the Federal Trade Commission, wrote in the Huffington Post, “When competitors form a truce, consumers need to worry because often they find ways to make consumers pay more by cutting off competition.” I believe, rather than decreasing competition, the tie-up could empower a viable third competitor in what is effectively a duopoly in smart phone competition. Antitrust law frowns on duopolies as inherently anticompetitive and transactions that create duopolies are the ones most frequently blocked.
MSFT and NOK are trying to compete as an integrated operating company with an integrated hardware/software solution just like Google (GOOG)/ Motorola Mobility (MMI) and Apple (AAPL). Hopefully, consumers will benefit from increased choice and competitive pricing pressure.
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