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Microsoft Businesses Cellphones Operating Systems The Courts Windows

Nokia Faces Class-Action Suit Over Windows Phone Deal 257

Posted by Soulskill
from the barn-doors-and-horses dept.
nk497 writes "Nokia has been hit with a class-action suit, with the claimant accusing the company of making 'false and misleading' statements about the ability of its deal with Microsoft to revive the struggling mobile maker. 'The complaint alleges that during the Class Period, defendants told investors that Nokia's conversion to a Windows platform would halt its deteriorating position in the smartphone market,' read a statement (PDF) from the law firm Robbins Geller Rudman and Dowd. 'It did not.'"
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Nokia Faces Class-Action Suit Over Windows Phone Deal

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  • by yog (19073) *

    It just proves that in America, you can sue anybody for anything.

    Nokia's defense would obviously be that market conditions changed, they could not possibly know the future, and all business decisions are inherently risky.

    Also, given that Microsoft invested hundreds of millions of dollars into Nokia, their decision to go with Windows phone OS can hardly be regarded as the riskiest of choices. When one of the world's largest corporations invests in you, you are not going to go out of business the next day, o

    • by Anonymous Coward on Friday May 04, 2012 @11:08AM (#39890569)

      It just proves that in America, you can sue anybody for anything.

      Uh...yeah? That's the way the system works. Anyone can bring an action against anyone else and the court must hear it.

      I could file paperwork with my local court saying you are a douche and that somehow harmed me. They would read through the documents and (probably pretty easily) come to the conclusion that I haven't made a case that you broke the law and/or harmed me and throw it out.

      Some cases aren't as clear-cut as my example and require a judge and jury to decide.

      Could you imagine if we used your model? You can't sue anybody for anything--only stuff I think is legit. That would put you in a fairly powerful position....something like 'dictator' or whatever.

    • Re: (Score:2, Flamebait)

      Or an idiot - you - is born every minute.

      The suit alleges Nokia lied to investors. This is very serious. Corporations lying to investors is not taken likely. If Nokia knowingly over-stated performance, then yes the suit has merit. Nokia had an entire year to turn things around. As it turned out, they did not. A bad 2012 1Q and project bad 2Q means Nokia is failing and that the deal with Microsoft did not help Nokia.

      Learn a thing or two about corporate financial reporting.
      • Re: (Score:3, Insightful)

        Forward-looking statements have disclaimers. This guy is a moron. There was no 'lying' to this at all.

      • by PickyH3D (680158) on Friday May 04, 2012 @11:24AM (#39890799)

        Wait, what? Nokia just released their first Windows Phones in November 2011, neither were released in the United States. At some point they released the Lumia 710 in the United States, and it sold pretty well, but it was on the smallest of the big carriers: T-Mobile. Now, Nokia has added the Lumia 900 to AT&T and it is supposedly selling pretty well (I live near a Microsoft Store, and I can honestly say that the store itself has been recently more popular than the Apple Store in the mall, but that mostly has to do with location within the mall; I have also seen a lot of people walking out with new Lumia 900 phones).

        Anyway, all of this is to say that you have no idea what you are talking about when you are talking about financial reporting. Two phones are not going to save a company, and at least two bad quarters were expected. Nokia is just now getting back into the swing of things, and people looking for instant success are both naive and represent what is wrong with investors in general these days.

        Otherwise, Motorola Mobility going with that "Android" platform is really proving to be a sinking ship, right? Because they've had two bad quarters too.

        Learn a thing or two about corporate financial reporting.

        • by 21mhz (443080)

          people looking for instant success are both naive and represent what is wrong with investors in general these days.

          Or, more often on this site, they need some superficial confirmation that Nokia was wrong in abandoning a Linux-based platform and going with Microsoft.

        • At some point they released the Lumia 710 in the United States, and it sold pretty well, but it was on the smallest of the big carriers: T-Mobile.

          Determines by what you mean "pretty well". I think I read that Nokia sold 2M Lumias since December. 2M in the US over 2 quarters isn't exactly a lot and Lumias don't appear to be selling nearly as well elsewhere. Nokia sold roughly 300K Symbian in Q1 and between 1.5-2M in Q4. It doesn't look good for WP7 if it can't beat a platform that isn't being advertised and is being actively phased out.

        • I think I'm going to sue the arcade in the mall. I wanted to play a game, but I couldn't. I had two bad quarters...

          8-|

    • by poetmatt (793785)

      I don't know about the legality, but a lot of people jumped ship when this deal was struck...I do recall many people had substantial disagreements with the deal in the first place.

    • by fuzzyfuzzyfungus (1223518) on Friday May 04, 2012 @11:10AM (#39890607) Journal
      Eh, I wouldn't be so quick to dismiss it.

      If you look at various SEC mandated, or voluntary, disclosures from publicly traded companies, you'll almost always see something like this example [timewarner.com] from Time Warner.

      Legally, distinguishing between statements of fact and 'forward looking statements' makes a difference. It's like the securities equivalent of the “These statements have not been evaluated by the FDA. This product is not intended to diagnose, treat, cure or prevent any disease.” tag you always see on 'dietary supplements'.

      So, if some optimist was given information that constituted a forward looking statement, with the usual boilerplate, about what Nokia hoped their strategy would do, they can go shove it. If Nokia outright claimed that this move would have a specific, definite effect, on their market position or stock price, Nokia may well have shoved their foot in their mouth, good and hard...
    • by cpu6502 (1960974)

      + 1 insightful.

    • by Anonymous Coward on Friday May 04, 2012 @11:27AM (#39890829)

      Also, given that Microsoft invested hundreds of millions of dollars into Nokia, their decision to go with Windows phone OS can hardly be regarded as the riskiest of choices. When one of the world's largest corporations invests in you, you are not going to go out of business the next day, or the next year.

      Except that Nokia intentionally and dramatically increased this risk by killing MeeGo, which is a production quality OS which kicks the shit out of Android and Windows Phone 7.

      I believe it's highly likely that Elop is acting in bad faith. However, unless a high ranking Nokia exec leaks information, I don't think there will be any tangible evidence against him.

      • by 21mhz (443080)

        Except that Nokia intentionally and dramatically increased this risk by killing MeeGo, which is a production quality OS which kicks the shit out of Android and Windows Phone 7.

        MeeGo proper was never even released on any commercially available device. What N9 got is a Maemo version bastardized and rebranded as MeeGo. And as somebody who has actually used the N9 and the Lumia 800 back to back, I attest that the software in N9 is nowhere near the quality of Windows Phone 7.

      • > by killing MeeGo, which is a production quality OS which kicks the shit out of Android and Windows Phone 7.

        And OpenMoko kicked the shit out of the iPhone too,right?

        Meanwhile in the real world, if there's no ecosystem or a company not capable of creating one, there is no sale.

    • by 21mhz (443080)

      That said, I believe Nokia would be better off turning their engineering expertise to producing some Android phones, to take advantage of the enormous app market. They are capable of making a great phone, but their operating systems have been marginalized by the success of Apple and Android.

      You are writing this as if there were some problem with finding great phone hardware for Android. While Samsung pulling out another plastic fantastic design for Galaxy S III gives some truth to this, I don't think Android needs Nokia so badly that it would find immediate success with Android devices.

      So why not go with one of the winners?

      Because it's better to go where the puck may be found when you get there, than chasing where it is now?

      Smartphones are not an established market, nobody knows how it will change over the next few years. It's not

    • You can sue anybody, for anything. It's winning on the frivolous cases that is much less common. Often, if you bring a stupid lawsuit, you end up paying for it yourself when you get laughed out of court.

      In this case, as long as the documents/correspondence the investors are citing has "we hope", "data shows", or "we believe" before "Windows phone is going to save us" then the plaintiff is SOL from the start, and the lawyers filing the suit are going to be out a TON of money.

    • by Bert64 (520050)

      The result of their strategy so far has been to accelerate their loss of market share, declaring symbian dead has been very effective at driving users away from the platform while changing plans for what your going to replace it with doesn't help.

      Also market conditions haven't changed that much, windows mobile was never very successful and windows phone wasnt very successful before the nokia deal so they had no real reason to believe it would be afterwards. On the other hand they had every reason to believe

  • Hahahahaha (Score:5, Funny)

    by GameboyRMH (1153867) <gameboyrmh@NoSpAM.gmail.com> on Friday May 04, 2012 @11:00AM (#39890469) Journal

    Whose platform is burning now, E-flop?

    • by Alex Belits (437) *

      Whose platform is burning now, E-flop?

      Still more profitable than Xbox, so it's OK.

      He is still a Microsoft employee, right?

  • Oh yeah, baby. (Score:5, Insightful)

    by tgd (2822) on Friday May 04, 2012 @11:00AM (#39890475)

    I'm going to sue for every stock I have that has lost value.

    And when I'm done, I'm going to sue all the companies who didn't go up as much as I would've liked!

    I'll be rich!

  • by sl4shd0rk (755837) on Friday May 04, 2012 @11:03AM (#39890493)

    Historically speaking, entering any kind of business deal with Microsoft usually ends badly.

    • Re: (Score:3, Interesting)

      by gtall (79522)

      I hate Microsoft like Satan hates his mother-in-law, but there's very little chance what you said is true. Some high profile cases have gone down the toilet hole, but a company the size of MS must work with hundreds of companies none of which would bother with MS if what you said was true.

      • by Anonymous Coward on Friday May 04, 2012 @11:52AM (#39891187)

        When one of the world's largest corporations invests in you, you are not going to go out of business the next day, or the next year.

        ïMicrosoft's new "strategic partnership" with Nokia is not its first. For a decade the software company has courted and consummated relationships with a variety of companies in mobile and telecom. Here are the ones I can remember:

        LG. In February 2009 Microsoft Corp. signed a multiyear agreement for Windows Mobile to be included on devices from LG Electronics Inc. LG would use Windows Mobile as its "primary platform"for smartphones and produce about 50 models running the software.

        What happened? LG made a few Windows Mobile devices but with WinMo uncompetitive, they abandoned the platform and moved to Android losing years of market presence and all their profits.

        Motorola. In September 2003, Motorola and Microsoft announced an alliance. "Starting with the introduction of the new Motorola MPx200 mobile phone with Microsoft Windows Mobile software, the companies will collaborate on a series of Smartphone and Pocket PC wireless devices designed to create a virtual "remote control" for the Web-centric, work-centric, always-on-the-go mobile professional." In addition, the alliance includes cooperation on joint marketing and wireless developer programs.

        What happened? Motorola launched a series of Windows Mobile phones culminating in the Motorola Q "Blackberry killer". As Motorola hit the rocks in profitability new management reached for the Android liferaft. The company now relies exclusively on the Droid franchise.

        Palm. In September 2005 Palm and Microsoft announced a strategic alliance to "accelerate the Smartphone market segment with a new device for mobile professionals and businesses. Palm has licensed the Microsoft Windows Mobile operating system for an expanded line of Treo Smartphones, the first of which will be available on Verizon Wirelessâ(TM) national wireless broadband network."

        What happened? Palm shipped a few Windows Mobile, famously dismissing Appleâ(TM)s potential entry as something "PC guys" could never achieve. A new CEO, a private placement and an acquisition later the company is a division of HP making its own operating system.

        Nortel. When Steve Ballmer was famously laughing at the iPhone and saying that he likes the Windows Mobile strategy "a lot" he was sitting next to the then-CEO of Nortel (Mike Zafirovski formerly of Motorola) with whom the company had just closed a strategic deal. "an alliance between Microsoft and Nortel announced in July 2006 ⦠includes three new joint solutions to dramatically improve business communications by breaking down the barriers between voice, e-mail, instant messaging, multimedia conferencing and other forms of communication".

        What happened? Nortel declared bankruptcy two years later.

        Verizon. In January 2009 "Verizon Wireless has selected Microsoft Corp. to provide portal, local and Internet search as well as mobile advertising services to customers on its devices. The five-year agreement will go into effect in the first half of 2009 when Microsoft Live Search is targeted to be available on new Verizon Wireless feature phones and smartphones." The deal would ensure Bing distribution to all of Verizonâ(TM)s smartphone customers.

        What happened? Bing did ship on some devices but in October 2009 Droid came to Verizon.

        Ericsson. In September 2000, "Ericsson and Microsoft Corp. today launched Ericsson Microsoft Mobile Venture AB. This previously announced joint company will drive the mobile Internet by developing and marketing mobile e-mail solutions for operators. The first solutions are expected to be on the market by the end of the year. The company is part of a broader strategic alliance between Ericsson and Microsoft"

        What happened? Ericsson divested itself of the mobile division forming a joint venture which would go on and make more strategic alliances with Microsoft over Windows Mobile culmina

    • Yeah, Dell has done pretty poorly.

    • Historically speaking, entering any kind of business deal with Microsoft usually ends badly.

      You mean like, Intel,AMD, Nvidia, HTC(who started out as a only-Windows Mobile OEM), Dell, HP, Sony, ASUS, Acer, Samsung, Lenovo... all of these got burnt and didn't make lots of profits because of their partnership with MS right?

      I think your sense of history is broken.

  • ...claims another victim.

  • by Chrisq (894406) on Friday May 04, 2012 @11:04AM (#39890513)
    From TFA:

    Filed in New York by a single complainant, the class-action suit....

    Surely if there is a single complainant then this should not be a class action suit?

    • Re: (Score:3, Informative)

      by Kjella (173770)

      Surely if there is a single complainant then this should not be a class action suit?

      As I've understood it, in class actions you sue for "me and everybody else like me", you don't actually need more than one direct victim if the suit passes muster. Not that I think this one will..

    • by lymond01 (314120)

      Only directly affected people can start a class action suit. Lawyers will try to get more people in on the suit.

      Gains of class action suits:

      1) "Victims" give the defendants a slap on the wrist (possibly a change in policy, etc) and generally come out with a few dollars
      2) Lawyers make ridiculous sums of money

      • by s73v3r (963317)

        Generally in class action lawsuits, the "victims" weren't harmed for a lot individually to start with. Thus, without the class action, each of them would have had to sue the defendant individually, meaning they all had to separately pay for lawyers, which may or may not have been cost effective.

        I'd like to hear your ideas on a better way to compensate a large group of people who had been harmed, but not to a large extent.

    • by micheas (231635) on Friday May 04, 2012 @11:10AM (#39890601) Homepage Journal

      The single claimant believes that there are other people that have the identical claim and it would be in Nokia and the courts interest if there was one lawsuit instead of many lawsuits.

      The problem for Nokia share holders is that it appears that their CEO is getting more compensation from Microsoft than Nokia, furthering this appearance of impropriety is his decisions that appear to favor Microsoft over Nokia.

      • by 21mhz (443080)

        The problem for Nokia share holders is that it appears that their CEO is getting more compensation from Microsoft than Nokia

        Source?

  • by Lord Lode (1290856)

    So the problem of the claimant is that Nokia is struggling, and his solution is to sue them, which could cause even more struggles?

  • Sounds to me like some whiny babies shouldn't be investing in the stock market.

    • Re: (Score:3, Funny)

      You know nothing about investing do you. That or you work for Goldman Sachs and love selling shit investments to your clients.
  • What is a "Nokia"?

    Seriously, the stakeholders can only blame themselves for not seeing this coming.

    • Re: (Score:3, Interesting)

      Again, management claimed all was right and performance would improve. If management knew this was untrue, then management was lying to investors, which is illegal.
    • What is a "Nokia"?

      A person, just like you and me :P

  • defendants told investors that Nokia's conversion to a Windows platform would halt its deteriorating position in the smartphone market...It did not.'"

    And you think hitting them with a lawsuit will?

    • Since when do shareholders care about the company? Tunnel vision for short term share price gains are all they care about, at best. At worst, they are shorting.
      • One year is short term?
        • by Shompol (1690084)
          No, one year is long-term. Here's the definition for you [investopedia.com]

          However, for the purpose of GP, the lack of long-term interest in corporation is the plague of all publicly-owned businesses everywhere. Why invest in long-term research and growth if you are only going to be a CEO for a few years? Why should investors care if they can dump company stock at the first opportunity?

    • It will allow investors to recoup their losses as opposed to keep losing money.
  • I'm pretty sure Nokia, just like any public corporation disclaims any and all of these forward-looking statements. This will get thrown out and the guy should be fined heavily for lawyer's fees and for frivulous litigation.

  • So this is what you do when you can't sue for breach of contract?
  • - the one they didn't actually have a hand in, in which an amusing Internet meme claims that the older Nokia phones are virtually indestructable ("Even Chuck Norris can't break one! So uses them for nunchucks!") - is probably going to do more for their brand reputation than any involvement with Microsoft ever could.
    • pity the newer ones aren't.

      The older nokia phones had user replacable covers that were a good mm or so from the screen. So you could crack the cover (say by sitting on your coat with your phone and keys in the pocket) and the screen would still be fine. with the newer phones that is not the case (mine is on it's third screen)

      Oh and with the old phones you could disable the backlight and the screen was still perfectly usable, again can't do that with the modern ones.

      • Really, I have a nokia N8 which is a fairly new Nokia phone. I have great fun with the apple fan boys at work when they go on about how wonderful theirs is and I point out that apart from apps there is little to choose between them*. However one of the tests they will never take me up on is the drop test.
        I've tested (intentionally or otherwise) it against wood, concrete and beer - so far so good up to about 6 foot. I have yet to find an iphone that has survived a drop of more than about 4 foot onto wood...
        I

  • when you elop(e) with someone MS.
    Your shareholders will want divorce and demand alimony.

  • As a N9 owner (Score:4, Informative)

    by scorp1us (235526) on Friday May 04, 2012 @11:17AM (#39890727) Journal

    The rough edges of the N9 were minor. It came with real multitasking and copy/paste from the first version. It's a great phone, and despite its rough edges it would have worked out well. There are a few gaps though, not the least bit applications. Nokia makes up for th at by including support for many things right out of the box.

    The biggest flaw with the N9 was that the OS was NOT a major OS. The decision to move to WP7, while lamentable was sensible. However I wonder if at the rate of innovation if the N9 would have been where it needs to be today.

    The deal that was not struck that should have, was to get Samsung on board and using MeeGo. That would have brought enough attention to get MeeGo established in the mobile marketplace.

    • by Microlith (54737)

      The biggest flaw with the N9 was that the OS was NOT a major OS.

      But it was ready, with multiple handsets in the pipeline (Lumia hardware was originally Harmattan targeted) and it would have been a stunning, welcome replacement for Symbian at Nokia's high end. I don't think for a moment they would have had trouble creating a userbase for it.

      The deal that was not struck that should have, was to get Samsung on board and using MeeGo.

      It may have happened, but likely not until well after Nokia themselves had tran

    • The biggest flaw with the N9 was that the OS was NOT a major OS

      The thing is I don't see WP7 as a major OS either. MS were late to the "multitouch+decent browser" smartphone market and then threw away the goodwill they had when they threw out all support for applications from thier pre-mulitouch smartphone platforn and replaced it with a locked down .net environment.

    • by gl4ss (559668)

      around the time they made the decision wp7 was a fairly marginal OS as well. still is(in pure numbers).

      it's just too bad that the leadership before elop was even stupider than elop(the company was on autopilot for years without direction, "shit will sort itself out" mode for meego,symbian etc for _years_).

      what the the wp7 did do was buy couple of years of excuses while waiting for the next version! a game nokia has liked to play since early 2000's it seems..

      anyhow - ms was shitting bricks because htc was m

  • Bad management and investment decisions are just that. Taking over a company by proxy without investing a single cent is something Finnish "SEC" should look at closely, if their govt officials weren't all bought and paid for.
    • Actually, there are civil and criminal laws. When a lawsuit is filed, they are talking about civil law. That being said, there are also laws against suckering people [wikipedia.org].
    • by 21mhz (443080)

      Taking over a company by proxy without investing a single cent is something Finnish "SEC" should look at closely, if their govt officials weren't all bought and paid for.

      Or perhaps, contrary to what armchair business analysts on Slashdot tend to think, they see that no such takeover has taken place.

    • I see this meme all the time. Please explain how Microsoft could install Nokia's CEO. The board's members have nothing to do with Microsoft.

      The chairman of the board who just left is Jorma.

      Here's his wiki entry: http://en.wikipedia.org/wiki/Jorma_Ollila [wikipedia.org]

      Read his profile through and you wouldn't think he could hand the company to MS even if paid a few million? Hell, his stock in Nokia would dip by that much for a little change in the stock price.

  • by Sara Chan (138144) on Friday May 04, 2012 @11:47AM (#39891105)
    Microsoft had a great reason to fear, and to conquer, Nokia: the Nokia N900 [wikipedia.org]. The N900 was arguably the best device ever: a full computer in a mobile form factor. It just needed some polishing of the user interface. Had the polishing been done, Nokia could have been on top of the smartphone market.

    With the planned successors to the N900, people would no longer need separate phones and computers. They would just have their Nokia N900-successor, carrying that with them all the time. At home, or in the office, they would attach a keyboard wirelessly and plug in a screen--and there is their computer. This would have led to a revolution in the way both computers and phones are considered.

    The N900 ran Linux. So the N900 was a vector for getting rid of Windows. Microsoft saw the threat, presumably, and moved to destroy it.
    • by theurge14 (820596)

      "If the polishing had been done."

      But it didn't and Nokia released it anyway. The only people I hear lamenting about or even using the N900 are geeks on Slashdot.

      I seriously doubt the specific reason Microsoft singled Nokia out was because the N900 ran Linux. Every Android and iPhone out there is running something other than Windows. It's gone way beyond threat, Microsoft is a minor player at the moment in the mobile OS arena at the moment and that can be attributed to waiting so long to take it seriously

  • It's a little bit of a longer game right now. Microsoft/Nokia haven't even fired up the main thrusters for this round. Until Windows 8 is ready, there's not going to be much happening. Once that is ready, and they come out with all guns blazing, it's going to be an interesting spectacle.

    For a long while it's just been Microsoft wanting to maintain it's dominant position, but this time it's a battle for the basic survival of Microsoft. They are going to fight, and fight hard. They may win, they may lose. Whi

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