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Google takes more aggressive stance, accuses Nokia, Microsoft of collusion

Fresh from closing its deal to acquire Motorola Mobility ? and the numerous patents that came with it ? Google appears to be taking a more aggressive stance in the ongoing mobile intellectual property wars and has alleged that Microsoft and Nokia are colluding to raise the price for mobile devices.

The search giant has filed a complaint with the European Union, asking it to investigate whether Nokia and Microsoft transferred patents to an alleged patent troll and are sharing in the revenue generated by those patents. Google contends that by doing so, the companies are colluding to raise prices for mobile devices.

"The pricing issue for smartphones is a sensitive issue for several reasons," said Marci Troutman, CEO of SiteMinis, Atlanta. "The lower the price the higher the penetration of users; if the price of smartphones rise too high, and the newest, better phones are too expensive users will opt to stay with their current phone vs upgrading.

"This hampers the ability for enhanced software and new functionality in the mobile space adaption, which will hurt some OS systems more than others, for instance Google and Android will have a more difficult time than iPhone or Windows," she said. "Another reason would be that NFC, augmented reality, mobile wallet and other enhancements will take longer to integrate into the general population.

"On the other hand if your Nokia / Microsoft this may be a brilliant strategy to mute the growth of Android and improve their penetration in the marketplace, it will depend on how the pricing with licensing costs translates to device manufactures costs."

Ms. Troutman is not affiliated with Google and spoke based on her experience in mobile.

Google did not respond in time to a request for comment.

Patents trolls
Google has reportedly also put forth similar complaints with United States regulators.

At issue is Nokia?s and Microsoft?s sale of 2,000 patents last fall to Mosaid Technologies Inc., with 1,200 of those patents reportedly essential to the operation of mobile devices. Reports suggest that the licensing fees from the patents could value over $3 billion in the next decade, money that Mosaid will share with Nokia and Microsoft per their agreement.

Google?s contention is that the companies are engaging in patent trolling, which is when patents are not used by the companies owning them other than to license them to others for the money and to aggressively enforce the patents by taking legal actions against competitors, and colluding to raise prices on mobile devices as a result.

"Nokia and Microsoft are colluding to raise the costs of mobile devices for consumers, creating patent trolls that side-step promises both companies have made," said Google in a statement. "They should be held accountable, and we hope our complaint spurs others to look into these practices."

Google has faced a host of legal issues in the mobile space over the years, ranging from patent infringement allegations against it as well as Android hardware makers, antitrust inquiries both here and in the EU and privacy-related lawsuits over how it tracks and uses customer data.

However, the company recently closed its deal to acquire Motorola, a deal which comes with 24,000 patents. Google has said previously that the strategy behind the deal to acquire Motorola was at least in part about acquiring the company?s patents to better protect itself in many of these legal confrontations.

Smartphone marketshare
Nokia has teamed up with Microsoft to support its Windows Phone mobile operating system. While smartphones built on the Windows Phone OS have not made a significant dent in the market to date, the phones are well-reviewed and widely considered to offer a viable third operating system in terms of being able to compete with Android and iOS for market share.

Both Nokia and Microsoft have dismissed the idea that any wrongdoing is afoot.

Whatever the outcome, Google's allegations show just how heated the competition among hardware manufacturers has become.

"Survival is at stake for the hardware makers at this point, it is life or death," Ms. Troutman said.