Google-Motorola deal moves forward, Justice Dept. could still block merger

Google-Motorola deal moves forward, Justice Dept. could still block merger

Summary: Considering the Justice Dept. is looking into the Google-Motorola deal, it could still end up on the scrapheap as the AT&T-T-Mobile merger did.

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Over the summer, Google out-of-the-blue announcement that it would acquire Motorola Mobility to become a fully-fledged mobile handset maker, in order to create an 'Android ecosystem', surprised all but everyone.

Google's update on the merger shows the deal as going through with "confidence", believing that it is a "pro-competitive transaction" good for all parties involved, from consumers, partners, and Motorola Mobility itself.

But for any deal to go through, the U.S. Department of Justice needs to rubber stamp the plans to ensure that competition does in fact remain fair, and that nobody is left at a major disadvantage as a result, or even worse -- bankrupt.

Google's blog update mentions a "second request" by the Justice Dept., part of ongoing talks and scrutiny by the government department over the past few weeks. The request, Google wants to highlight, is "routine", as it enables the Justice Dept. to review the deal in more detail.

But considering that only 4 percent of all deals last year were asked a second time by antitrust agencies, it may not be as "routine" as Google suggests.

The search giant acknowledges that the deal "won't be closing right away", but remains confident. Confidence is one thing, however. All one needs to do is turn to the AT&T and T-Mobile merger to see how plans can become suddenly derailed.

In the AT&T and T-Mobile case, one of the points was that it would "substantially lessen competition". Nobody yet can fully gauge how far the deal will push Motorola sales; presumably exponentially over the coming years.

Motorola does not manufacture, nor sell as many handsets as Samsung, which remains as the most popular phone manufacturer in the United States. Perhaps if Samsung, a major Android partner, and Google were to merge, this would be an unstoppable force for which Apple along with others would no doubt file motions to block the deal.

Not only will Google face difficulty with remaining in partnership with other Android makers, like HTC and Samsung, the Justice Dept. will need to focus heavily on the 'patent matter'. Considering so many lawsuits focus on Android as a centrepiece to their suits, regarding Android patents and licensing -- or lack thereof -- acquiring so many patents could be the single reason behind the Justice Dept. filing a motion to block the merger.

For now, Google does not have a home run just yet. It can see the finish line but has to tackle a hefty Justice Dept. hurdle yet to win the race and to claim its prize.

It's something to think about, nonetheless.

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Topics: Google, Banking, Mobility, Security, Wi-Fi

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