UPDATED 09:52 EDT / JANUARY 12 2012

LG Signs Microsoft Patent Deal, Faces Fines for Price Fixing

LG Corp., the second-largest South Korean electronics conglomerate company, is creating quite a big buzz, starting with product launches at this year’s CES, and now, they’re caught up in patent deals, looking to investors for stabilization, and being fined for fixing prices.


Last year Microsoft was awfully busy signing patent deals with Android ODMs and getting rich by collecting royalties, which Google executive chairman Eric Schmidt wasn’t entirely happy about.

2012 is just getting started and Microsoft adds another Android ODM partner to their list: LG. Microsoft and LG just signed a patent agreement that provides broad coverage under Microsoft’s patent portfolio for LG’s tablets, mobile phones and other consumer devices running the Android or Chrome OS platforms. The contents of the agreement have not been disclosed.

“We are pleased to have built upon our longstanding relationship with LG to reach a mutually beneficial agreement. Together with our 10 previous agreements with Android and Chrome OS device manufacturers, including HTC, Samsung and Acer, this agreement with LG means that more than 70 percent of all Android smartphones sold in the U.S. are now receiving coverage under Microsoft’s patent portfolio,” said Horacio Gutierrez, corporate vice president and deputy general counsel, Intellectual Property Group at Microsoft. “We are proud of the continued success of our program in resolving the IP issues surrounding Android and Chrome OS.”

LG-Samsung Conspiracy

According to South Korea’s antitrust regulators, LG and Samsung conspired to boost prices for some of their products in their local market.  The two companies said to have conducted meetings back in 2008-2009 to share information and raise prices of their products giving both of them the upper hand.

An e-mailed statement from the Korea Fair Trade Commission to Bloomberg Businessweek stated that the companies will be fined 45 billion won ($39 million) in total for fixing prices of washing machines, flat-screen TVs and laptop computers.

LG spokeswoman Claire Jang said that the company will step up efforts not to repeat the practice,while Samsung spokeswoman Chenny Kim stated that they would withhold commenting until they received the official notice of the ruling.

LG Looking For Investors?

Though LG is still the world’s third largest phone maker, it doesn’t follow that they would also be third in units sold.   According to Gartner, during the third quarter of 2011, LG only sold 4.8% of all mobile handsets worldwide, compared to the 6.6%for the same quarter the year before.

In order to turn things around, LG has had a  few high-profile management changes in their mobile division as well as raised some $1 billion in the markets and now, they’re looking for partners to make their company stable.

“We’re looking into almost every alliance that the mobile industry can think of,” the chief executive of LG’s mobile business, Park Jong-seok, told Reuters. He further said that some of those talks are “quite active.”

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