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February 13, 2012

EU Signs Off on Google's Motorola Mobility Acquisition

By Beecher Tuttle, TMCnet Contributor

Google (News - Alert) cleared a critical hurdle on Monday when its $12.5 billion acquisition of Motorola (News - Alert) Mobility was approved by the European Union, putting the company another step closer to owning a trove of highly coveted wireless patents. The U.S. Justice Department is widely expected to follow suit and sign off on the deal later this week, as are several Asian nations within the next month.



While granting unconditional regulatory approval, EU regulators did fire a few warning shots across Google's bow, informing the Android maker that it will closely monitor the situation to ensure that the company doesn't abuse the power that comes with Motorola's 17,000 patents and its 7,500 pending patent applications.

"This merger decision should not and will not mean that we are not concerned by the possibility that, once Google is the owner of this portfolio, Google can abuse these patents, linking some patents with its Android devices," EU Competition Commissioner Joaquin Almunia told Reuters. "This is our worry."

Almunia's fear of patent abuse is understandable. Intellectual property litigation involving mobile tech companies reached near-preposterous levels this year as Apple, Samsung (News - Alert), HTC, Microsoft, Google and a host of others sued each other any virtually any courtroom that would allow it. As a latecomer in the mobile space, Google – along with all manufacturers that rely on Android – has been the target for much of the litigation.

Google has tried to make it clear that it will not use the newfound intellectual property to start more patent wars. The company has promised to license the patents to companies on a fair, reasonable, and non-discriminatory basis – or "Frand" – after it heard grumblings from consumer interest group that expressed concern.

The EU approved the deal after looking at a variety of scenarios in which Google could use Motorola's patents to discourage competition and innovation, finding none of them viable. The main conjecture was that Google had no reason to close Android off to other mobile device manufacturers after acquiring its own hardware stake.

"The Commission's investigation showed Android helps to drive the spread of Google's other services," the EU noted in a statement. "Consequently, given that Google's core business model is to push its online and mobile services and software to the widest possible audience, it is unlikely that Google would restrict the use of Android solely to Motorola, a minor player."

In addition, the EU agreed that the move would not give Google any materially significant advantages in its other businesses, such as advertising or search.

Google could gain global approval as soon as March if the U.S., China, Taiwan and others move forward as planned.

In related news, another huge patent deal involving bankrupt telecom Nortel (News - Alert) is expected to be approved by the Department of Justice in the coming days, sources told the Wall Street Journal. A consortium of companies – included Apple (News - Alert), Microsoft and RIM – chipped in a cool $4.5 billion for the patents. The consortium's final offer dwarfed Google's $900 million stalking horse bid, causing some to raise their eyebrows over how the companies planned on using the chest of patents against the search engine giant.


Beecher Tuttle is a TMCnet contributor. He has extensive experience writing and editing for print publications and online news websites. He has specialized in a variety of industries, including health care technology, politics and education. To read more of his articles, please visit his columnist page.

Edited by Rich Steeves

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