Google's Motorola buy gets green light from US and EU
The EU and US have both given their approval to Google's takeover of Motorola Mobility, while noting that they are closely monitoring the fairness of licensing terms in the ongoing mobile patent wars.The $12.
The EU and US have both given their approval to Google's takeover of Motorola Mobility, while noting that they are closely monitoring the fairness of licensing terms in the ongoing mobile patent wars.
The $12.5bn (£7.6bn) buyout was announced last August, but antitrust regulators have to give it the green light before it can take place. On Monday, that clearance came from regulators in the US and EU. Taiwan, China and Israel are yet to say whether or not they approve of the deal.
"We have approved the acquisition of Motorola Mobility by Google because, upon careful examination, this transaction does not itself raise competition issues," EU competition commissioner Joaquín Almunia said in a statement. "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."
"After a thorough review of the proposed transactions, the Antitrust Division has determined that each acquisition is unlikely to substantially lessen competition and has closed these three investigations," the DoJ said.
All about the patents
The issue of patents is central to Google's Motorola takeover, as the purchase comes with 17,000 granted patents and a further 6,800 patents that have been applied for but not yet granted. Google may be a major mobile player now, since it entered the market with Android, but the Motorola deal gives it the sort of patent arsenal that a company gathers through being a longstanding mobile technology firm.
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.
– Joaquín Almunia , EU
Some of the patents Google will be getting will be 'standards-essential', meaning they are necessary parts of standards such as 3G. Generally, such patents have to be licensed to competitors under fair, reasonable and non-discriminatory (FRAND) terms — the patent owner cannot charge an unreasonable amount, and they have to charge any company the same licensing fee.
The EU's antitrust regulators are currently investigating Samsung, an Android phone manufacturer, over its alleged failure to fairly license its standards-essential patents (SEPs) to rivals.
Motorola and Google have come under attack over a similar issue. In the interminable mobile patent war, Apple and Microsoft have decried Motorola's decision to demand up to 2.25 percent of a device's sale price to allow that device to use its standards-essential patents. Both Apple and Microsoft boasted of their own commitments to FRAND terms, and said no company should use SEP licensing issues as a way of trying to block the sale of their rivals' products.
When it responded to this criticism in a recent letter to the IEEE standards-setting body, Google indicated that it would stick with the 2.25 percent maximum royalty cap, which its rivals say is excessive.
Google's FRAND letter did not escape the attention of the DoJ's antitrust division.
"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 DoJ noted in reference to the other two investigations it was closing. "Google's commitments were more ambiguous and do not provide the same direct confirmation of its SEP licensing policies."
The DoJ said it "continues to monitor the use of SEPs in the wireless device industry, particularly in the smartphone and computer tablet markets", and "will not hesitate to take appropriate enforcement action to stop any anticompetitive use of SEP rights".
For its part, the European Commission noted that its clearance of the Google-Motorola deal "is without prejudice to potential antitrust problems related to the use of standard essential patents in the market in general".
"However, any such issues would not arise specifically as a result of the proposed transaction," the Commission concluded.
