Google cleared for Motorola Mobility acquisition
Michelle Clancy ©RapidTVNews | 15-02-2012
Regulators in Europe and the United States have cleared the way for the $12.5 billion acquisition of wireless gadget- and set-top box-maker Motorola Mobility.
Motorola Mobility holds roughly 17,000 patents as well as 6,800 patent applications. While some are standard essential patents (SEPs) that the company has committed to licence through technical standards bodies, some of the others have been the source of ongoing patent disputes with rivals that some say are holding up the marketplace.
Nonetheless, the European Commission and U.S. Department of Justice both said that the deal was unlikely to substantially lessen competition as per existing market dynamics.
"The evidence shows that Motorola Mobility has had a long and aggressive history of seeking to capitalise on its intellectual property and has been engaged in extended disputes with Apple, Microsoft and others," the Justice Department stated. "As Google’s acquisition of Motorola Mobility is unlikely to materially alter that policy, the division concluded that transferring ownership of the patents would not substantially alter current market dynamics. This conclusion is limited to the transfer of ownership rights and not the exercise of those transferred rights."
Joaquin Almunia, European Commission vice president in charge of competition policy, warned that the companies will remain under scrutiny. "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.
And indeed, the competitive throwdown over patents could have profound effects on the market if left unchecked. "For example, Apple would likely benefit significantly through increased sales of its devices if it could exclude Android-based phones from the market or raise the costs of such phones through IP-licenses or patent litigation," the Justice Department said. "Google could similarly benefit by raising the costs of, or excluding, Apple devices because of the revenues it derives from Android-based devices."
Motorola is also one of the keading manufacturers of STBs, meaning that Google will find itself with a rich ecosystem with which to leverage its Google TV platform. The acquisition of Motorola Mobility aso would expand Google's expertise in the wireless market by adding a hardware manufacturing component to its extensive Android OS customer base; the platform already accounts for 46% of the smartphone market in the U.S. based on subscribers.
Google still needs regulatory approvals in China, Israel and Taiwan.