With Motorola acquisition, Google makes itself a legal target

With Motorola acquisition, Google makes itself a legal target

Summary: The Google-Motorola deal may make perfect sense from an Android perspective. But with antitrust hearings looming, Google may have just painted itself a legal bullseye.

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By now, you doubtless know all about Google's acquisition of Motorola Mobility, a move that turns the search giant into a full-fledged player in the smartphone manufacturing market. But while this deal has many upsides for Google - a defensive shield against patent lawsuits, control over the Android ecosystem from software to hardware - there's one major, overriding downside.

With the purchase of Motorola Mobility, Google may well have made itself an even riper target for the Federal Trade Commission's ongoing antitrust investigation. And that's not even mentioning the lawsuits Google could face from jilted Android handset manufacturers.

Rewind back to last week, when we heard reports that the FTC was broadening its probe of Google's business practices to include Android.

The goal of the expanded probe: to find out whether or not the company was throwing its weight around and preventing its Android manufacturer partners from adopting competitors' services - which could simply refer to mapping applications, or it could be about rival mobile operating systems like Microsoft Windows Phone 7.

If that's true, then Google-Motorola just alienated Samsung, HTC, and any other Android partner that the company applied pressure to. After all, in this hypothetical scenario, Google likely promised them a level playing field and the full support of the Googleplex in exchange for their cooperation. But there's no guarantee that Google won't pull the Android rug out from under them now that it has Motorola Mobility to grant total control.

While Google has publicly reaffirmed its commitment to these smartphone partners in the wake of the deal, saying that Motorola will get no special treatment from the Android team, I imagine there are escape plans being formulated in manufacturer boardrooms across the world. There may even be a lawsuit or two levied for deceptive or anticompetitive business practices.

In short, Google isn't making itself any friends with the Motorola acquisition, despite initial appearances, and thinking through the scenario I described is likely keeping teams of regulators busy as we speak.

And even if the FTC investigation of Google's Android business practices comes to nothing, the Motorola Mobility acquisition still leaves Google on the hook. Google Android already commands 39 percent of the smartphone market, ahead of even Apple, a fact largely attributed to the company's practice of giving away the operating system to recoup costs on search and mobile ads.

Regulators were already concerned with the idea that Android forced users to use Google services, as we've already seen. The fact that Google itself will now be ultimately behind the hardware that many consumers will end up using is only going to make those same regulators that much more determined to leave no stone unturned.

Google may have spent $12.5 billion on Motorola, but it's only going to make the legal scrutiny around its business that much more intense. No matter the details, many are going to see this move as Google reinforcing its position at the top of the heap, and I have no doubt that the FTC will be looking deeply into the consequences to make sure that every single aspect is on the level.

Essentially, the short-term, possibly reactionary decision to acquire Motorola and its patents to fend off legal action may have longer-term consequences for Google as a whole. And come the start of antitrust hearings on September 21st, Google will have to prove it's not a competition-stifling monopolist even as behind the scenes it works to integrate Motorola into its business.

Topics: Mobility, Banking, Enterprise Software, Google

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25 comments
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  • google was forced to but motorola

    if it was not for apple asking ban on samsung galaxy tab and many many more ip violation suing by M$ and Apple, then google would not have bought Motorola, anyone can understand that.


    What else do you want google, watch apple and M$ killing it with patents?
    programAngel
    • RE: With Motorola acquisition, Google makes itself a legal target

      @programAngel
      "Do no evil". Hmmm, I wonder what Android phone manufacturers are now thinking? :-)
      Wakemewhentrollsgone
      • RE: With Motorola acquisition, Google makes itself a legal target

        @ptorning
        what evil have they done by buying motorola?


        They have to but it or else Android would be dead.
        Why should they let M$ and Apple to kill android?
        programAngel
    • Any antitrust oversight will focus on illegal business practices

      Which at this stage have nothing to do with Motorola.

      Given the behavior of MS and the eventual settlement I wouldn't be at all worried of the DoJ if I was Google.
      Richard Flude
      • RE: With Motorola acquisition, Google makes itself a legal target

        @Richard Flude
        If you thing antitrust only focus on "illegal business practices", then you are truly lost.
        illegaloperation
    • RE: With Motorola acquisition, Google makes itself a legal target

      @programAngel

      Tell Google to quit violating others IP, and they wouldn't have been in this hole to begin with! IP is IP no matter who who think you are. Google is no different than anyone else.
      The one and only, Cylon Centurion
      • RE: With Motorola acquisition, Google makes itself a legal target

        @Cylon Centurion

        IP=Imaginary Property
        DonRupertBitByte
      • RE: With Motorola acquisition, Google makes itself a legal target

        @DonRupertBitByte

        Does it? Tell me, if you were to invent something, whether it be a product, service, process, code, etc. Would you not want to patent it, to protect your investment into making said invention? How would you feel if a bigger bully came into the fray, told you off, and stole your IP to make a competing product?
        The one and only, Cylon Centurion
      • RE: With Motorola acquisition, Google makes itself a legal target

        @Cylon Centurion Still waiting to see this IP they are violating!
        slickjim
      • RE: With Motorola acquisition, Google makes itself a legal target

        @Peter Perry

        They're violating something if HTC, Samsung, et al choose to settle with Microsoft rather than fight back.
        The one and only, Cylon Centurion
      • You tell 'em Cylon!

        <i>" ... IP is IP no matter who who think you are ..."</i><br><br>That's right! Apple invented the <i>beveled rectangle</i>, so there!<br><br> If i was Steve Jobs, i'd try patenting the right angles in a rectangle too .. because i'd think i'd have earned the right to!
        thx-1138_
  • RE: With Motorola acquisition, Google makes itself a legal target

    All the OEMs now understand that Google is the worst a**h*** out there. They might be feeling used and betrayed, especially Sony Ericsson.

    Google took unethical shortcuts for creating android, now fan boys are crying about innovation /competition etc.

    The death of android and probably the downfall of google are in the horizon.

    Apple may be soon dumping google search/maps and Ballmer may be more pleased to see Apple coming to his camp.

    S. Jobs still have a score to settle with google. That Schmidt idiot used to sit in apple board and steal iPhone ideas and secretly developed android. Apple will take revenge one day and it may be in the form of bing.

    Once google search share goes below 50 percent, then they are doomed. Nobody take google docs seriously.
    owlnet
  • Utter Nonsense

    nt
    Dietrich T. Schmitz *Your
    • Agreed....

      @Dietrich T. Schmitz * Your Linux Advocate
      Since the Motorola Razor was a very popular phone, and before the iPhone, I wonder how many of Motorola patents that Apple, or even Microsoft, has infringed on from the early Motorola phones???
      linux for me
  • RE: With Motorola acquisition, Google makes itself a legal target

    Umm no, Android is close to 50% marketshare and is far ahead pf Apple.

    And this has nothing to do with their Antitrust issues as Android really is not part of them.

    So please explain how an open and free operating system can get somebody in trouble for antitrust violations?
    slickjim
    • RE: With Motorola acquisition, Google makes itself a legal target

      @Peter Perry <br><br>Paul Thurrott has a very good article on his SuperSite:<br><br>h t t p : / / w w w .winsupersite.com/blog/supersite-blog-39/mobile-computing-devices/android-heading-fall-140173

      Android is hardly "Open and free". It's a farce to think of it like it is.
      The one and only, Cylon Centurion
      • RE: With Motorola acquisition, Google makes itself a legal target

        @Cylon Centurion Okay, so I guess they should go after Apple for Dumping iTunes, MS for Dumping IE and Sun for Dumping Open Office huh?

        While we are at it, let's talk about Apple bundling iLife and OS X with Hardware... Or MS for bundling Kinect with the 360 at a reduced rate.

        Oh and next time try somebody a little more objective than an everything Windows Blogger.
        slickjim
  • RE: With Motorola acquisition, Google makes itself a legal target

    So true. I'm expecting an antitrust suit to be filed against Google.
    Loverock Davidson_
  • RE: With Motorola acquisition, Google makes itself a legal target

    Is Google becoming the Wal-Mart of the information industry? in every single way, good and bad it seems.
    opcom
  • Actually there is a bigger problem for Google

    Google is an advertising company that uses a first rate search engine as their advertising vehicle.

    Motorola is a manufacturing entity. Not too hot at marketing, but manufactures good products.

    Advertisers typically destroy manufacturers when a deal like this is solidified. The metrics are totally different and Advertising management is ill equipped to deal with manufacturing needs.

    Motorola will be dead in 24 months, and the fine print in the contract determines what patents Google really bought.

    All that combined with the now uneven playing field for other Android adoptors means Google has some real problems to deal with.

    Bet Samsung and all the others wished they had another OS about now. Heck, maybe even Windows 8 is looking really nice to these guys.

    After all Google is now a direct competitor - I can imagine they are a bit peeved.
    theoldman59