Google/Motorola deal picks up EC, US clearance - Mobile World Live

Google/Motorola deal picks up EC, US clearance

14 FEB 2012

The European Commission and the US Department of Justice gave the green light to Google’s US$12.5 billion acquisition of Motorola Mobility, paving the way for the completion of the transaction, which was first announced in August 2011.

Don Harrison, VP and deputy general counsel for Google, said: “as we outlined in August, the combination of Google and Motorola Mobility will help supercharge Android. It will also enhance competition and offer consumers faster innovation, greater choice and wonderful user experiences.”

In a statement, Joaquin Almunia, the VP in charge of competition policy for the EC, said: “We have approved the acquisition of Motorola Mobility by Google because, upon careful examination, this transaction does not itself raise competition issues. Of course, the Commission will continue to keep a close eye on the behaviour of all market players in the sector, particularly the increasingly strategic use of patents.”

The Commission noted that “the Commission’s investigation showed Android helps to drive the spread of Google’s other services. Consequently, given that Google's core business model is to push its online and mobile services and software to the widest possible audience, it is unlikely that Google would restrict the use of Android solely to Motorola, a minor player in the European Economic Area (EEA), as compared to operators such as Samsung and HTC.”

The DoJ announced its clearance of the Google/Motorola transaction at the same time as clearing the acquisition of Nortel Networks’ patent portfolio by a consortium including RIM, Microsoft and Apple, and approving the acquisition of intellectual property created by Novel by Apple.

With regard to the Motorola transaction, it said that this company has a “long and aggressive history of seeking to capitalise on its intellectual property and has been engaged in extended disputes with Apple, Microsoft and others. As Google’s acquisition of Motorola Mobility is unlikely to materially alter that policy, the division concluded that transferring ownership of the patents would not substantially alter current market dynamics.”

The Department said that during the course of its investigation, Apple and Microsoft made “clear commitments” to licence standards-essential patents (SEPs) on fair, reasonable and non-discriminatory (FRAND) terms, as well as committing not to seek injunctions in disputes involving them. However, it noted that “Google’s commitments were more ambiguous and do not provide the same direct confirmation of its SEP licensing policies.”

“In light of the importance of this industry to consumers and the complex issues raised by the intersection of the intellectual property rights and antitrust law at issue here, as well as uncertainty as to the exercise of the acquired rights, the division continues to monitor the use of SEPs in the wireless device industry, particularly in the smartphone and computer tablet markets. The division will not hesitate to take appropriate enforcement action to stop any anticompetitive use of SEP rights,” it continued.

With regard to RIM and Microsoft’s role in the Nortel deal, the DoJ argued that: “their low market shares in mobile platforms would likely make a strategy to harm rivals either through injunctions or supracompetitive royalties based on the acquired Nortel SEPs unprofitable.” It notes that these companies would be “unlikely to attract a sufficient number of new customers to their mobile platforms to compensate for the lost patent royalty revenues.”

It also notes that Microsoft already has a practice of cross-licensing patents to Android device manufacturers.

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Steve Costello

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