Stephen Elop, executive vice president of Nokia, speaks during the keynote address at the Microsoft Developers Build Conference in San Francisco on April 2. Photo: CFP

The Ministry of Commerce announced Tuesday that it had approved Microsoft Corp's bid to acquire Nokia's mobile phone and services business, having received promises from both companies that the deal would not lead to higher prices for mobile phone makers in the ­Chinese market.

The approval clears the way for the massive deal worth 5.4 billion euros ($7.4 billion), which the two companies agreed on in September 2013.

The Ministry of Commerce said in a statement on Tuesday that its investigations had found that the deal could potentially restrict competition in China's mobile phone market.

To address the ministry's concerns, Microsoft agreed not to restrict Chinese phone manufacturers from using patents needed to comply with a technical standard on their Android phones, the statement said.

Microsoft also agreed to issue nonexclusive licenses for Android smartphones that use Microsoft's patents, and said it would not raise the fees for such services in the country after the deal. These commitments will last for eight years.

Meanwhile, Nokia also agreed not to seek to impose unfair conditions for licensing in the country.

According to a press release published on its website Tuesday, Nokia said its deal with Microsoft is expected to close by the end of the month, which will see Microsoft take over Nokia's phone and services business while Nokia keeps its patent portfolio.

"The regulatory approval process has involved a thorough review of Nokia's patent licensing practices by several competition authorities around the world," it said.

During that process, no authority challenged Nokia's compliance with its undertakings related to standard-essential patents or requested that Nokia make changes to its licensing program or royalty terms, it said.

A member of the PR staff at Microsoft China said the company had no immediate comment on the approval.  

China's approval came after the European Commission, the US and other countries gave the green light for the deal.

China began its antitrust investigation into the deal in October and the ministry said it took longer to reach a decision because it was one of the most complicated cases since the country's implementation of its Antitrust Law, and because the impact of the deal could be bigger in the Chinese market than in others.

"The decision to give a green light to the deal with certain conditions is based on the development stage and technical level of the Chinese market," Huang Yong, a law professor at the Beijing-based University of International Business and Economics, told the Global Times on Tuesday.

As China has many downstream phone equipment makers, it is reasonable to raise concerns about possible effects from the deal, Huang said.

From 2008, when the Antitrust Law was established, to the end of 2013, China approved 717 merger and acquisition deals without conditions, or 97 percent of all the cases it reviewed.

In a rare case, China did not approve Coca-Cola's bid to acquire China Huiyuan Juice Group in 2009, over concerns that the deal could disturb market competition.

Tuesday's approval from China's authorities may not immediately boost the influence of Microsoft and Nokia in the Chinese market but will likely benefit them in the capital markets, Huang Meng, a Beijing-based independent IT analyst, told the Global Times Tuesday.

Microsoft, which stopped support for its Windows XP operating system on Tuesday, remains a leader in China's PC software market. 

Nokia, once the top global mobile phone maker, has lost ground to Apple and Android smartphones in recent years. Its share of China's mobile phone market was just 2.89 percent at the end of the fourth quarter of 2013, according to a report released in March by Beijing-based consulting firm Analysys International. 

Shares in Nokia rose by 7.2 percent to $7.74 in trading in the US as of 11:00 pm Beijing time Tuesday, while shares in Microsoft fell 0.16 percent to $39.74.