SAN FRANCISCO—Regulatory agencies from the U.S. and the European Union Monday (Feb. 13) gave the thumbs up to Google Inc.'s proposed $12.5 billion acquisition of Motorola Mobility Inc.
The U.S. Justice Department's antitrust division said that its investigation determined that Google's acquisition of handset and tablet maker Motorola is unlikely to substantially lessen competition. The division also said the acquisitions by Apple Inc., Microsoft Corp. and Research in Motion Ltd. (RIM) of Nortel Networks Corp. patents and the acquisition by Apple of Novell Inc. patents would also not lessen competition. The division closed its investigations on all three transactions.
"The division concluded that the specific transactions at issue are not likely to significantly change existing market dynamics," it said in a statement. The antitrust division's focused on standard essential patents (SEP) that Motorola and Nortel had committed to license to industry participants through their participation in standard-setting organizations and whether the acquiring firms could use these patents to raise rivals' costs or foreclose competition, it said.
Approval of U.S. and E.U. regulators was apparently the last remaining hurdle to Google's acquisition of Motorola Mobility, first announced last August.
During the investigations, Google, Apple and Microsoft made commitments to continue licensing the patents, the antitrust division said.
"The division's concerns about the potential anticompetitive use of SEPs was lessened by the clear commitments by Apple and Microsoft to license SEPs on fair, reasonable and non-discriminatory terms, as well as their commitments not to seek injunctions in disputes involving SEPs," the statement read. "Google’s commitments were more ambiguous and do not provide the same direct confirmation of its SEP licensing policies."
The Justice Department added that the antitrust division would continue to monitor the use of SEPs in the wireless device industry, particularly in the smartphone and tablet markets. "The division will not hesitate to take appropriate enforcement action to stop any anticompetitive use of SEP rights," the statement read.
The European Union's regulatory agency, the European Commission, said it approved the transaction "mainly because it would not significantly modify the market situation in respect of operating systems and patents for these devices."
In a statement, Joaquín Almunia, vice president in charge of the commission's competition policy, said the commission concluded that the transaction would not itself raise competition issues. "Of course, the commission will continue to keep a close eye on the behavior of all market players in the sector, particularly the increasingly strategic use of patents," Almunia said.
The commission said it considered whether Google would be likely to prevent Motorola's competitors from using the Android operating system and concluded that it would not, chiefly because Google uses Android to help spread its other services.
The commission also concluded that the acquisition of Motorola's patent position in telecommunications would not significantly change the existing market situation.
Congratulations to Google and Motorola. This is wakeup call not just for apple but for other Android OS mobiles also. Motorola might get slight advantage over other Android OS mobiles namely Samsung, LG etc. Google should make sure that none of its android OS users are affected by this purchase.