Google Gets Motorola Deal Clearance from U.S. Justice, EU
Commission says buyout won’t alter market competition but warns of close eye on patents.
Google Inc. gained approval yesterday from the U.S. Department of Justice and the European Commission for its $12.5 billion deal to acquire Motorola Mobility, a transaction the search giant initiated last August to immediate anti-competitive concerns.
The Justice Department said in a statement that it had completed and closed its investigation of the transaction, despite not gaining a commitment from Google to license standard essential patents (SEPs) gained from the deal on “fair, reasonable and non-discriminatory terms.”
Motorola holds hundreds of standard essential patents (SEPs) related to wireless devices.
Justice officials warned that the division will continue to “monitor the use of SEPs in the wireless device industry, particularly in the smartphone and computer tablet markets” for anticompetitive actions.
In a related announcement, the Department also said that it had cleared Apple Inc., Microsoft Corp. and Research in Motion Ltd. (RIM) to acquire certain patents from Nortel Networks Corp. for some $4.5 billion and approved Apple’s acquisition of patents from Novell Inc.
Justice Department officials said that they were concerned in each transaction about the ability of the acquiring companies to use the deals to raise costs or bar competition.
“The division’s investigations focused on whether the acquiring firms could use these patents to raise rivals’ costs or foreclose competition,” officials said.
The EU, employing similar rationale in its ruling, said that its regulators will pay close attention to how Google and other companies strategically use patents in the wireless industry.
"We have approved the acquisition of Motorola Mobility by Google because, upon careful examination, this transaction does not itself raise competition issues,” said Joaquin Almunia, EU Commission vice president in charge of competition policy.
“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," he said.
Don Harrison, Google vice president and deputy general counsel, in a blog post, called the Commission’s approval “an important milestone” to finalizing the deal, which the company believes to be central to its mobile strategy going forward.“The combination of Google and Motorola Mobility will help supercharge Android,” Harrison said.
Google is still waiting for approval on the deal from other countries where it conducts business, including China.
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