Microsoft Corporation (MSFT) and Samsung Electronics Co Ltd (ADR) Engage In War of Words

Earlier in this year 2014, Microsoft Corporation (NASDAQ:MSFT) had filed a suit against Samsung Electronics claiming that not only did the South Korean manufacturer owe $6.9 million in form of damages to the tech giant but was also late in paying $1 billion which was meant as royalty. The vice-versa happened on Thursday when Samsung Electronics filed a lawsuit against Microsoft Corporation (NASDAQ:MSFT), accusing the latter of breaching an agreement pertaining to business collaboration.

Origin of this battle can be traced to the Windows mobile phones which failed to create even a faint ripple in the market. With the intention of acquiring prominence in this field as also accrue at least a fraction of benefits that its competitors were earning, Microsoft Corporation (NASDAQ:MSFT) decided to pair with Samsung in 2011. When the results were still not forthcoming, Microsoft acquired Nokia, thus causing Samsung Electronics to withdraw from sharing sensitive information.

Microsoft (MSFT)

As per Samsung Electronics, Nokia is a competitor and hence Microsoft’s agreements with both amount to collusion since it stood in violation of the 2011 contract between two parties. Its concern was voiced in the following statement –

“The agreements were intended to embody collaboration between a manufacturer and a supplier but the Nokia acquisition incentivized Microsoft to promote its own smartphones over those manufactured and sold by Samsung,”

On its part, Microsoft Corporation (NASDAQ:MSFT) acquired Nokia for $9.4 billion and hence is bent on accruing maximum profit to prove its worth. Therefore, far from backing down, it is confident of facing Samsung Electronics in court and its upper hand is reflected in the following statement –

“Microsoft is confident that our case is strong and that we will be successful.”

In spite of the controversy, shares of Microsoft Corporation (NASDAQ:MSFT) closed at $46.95 which is almost 2% higher than its value during the previous trading session.

This article has been written by Vinita Basu.

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