U.S., EU Antitrust Regulators Approve Google's $12. 5 Billion Takeover of Motorola

By Joe Kirwin  

BRUSSELS—Antitrust regulators in the United States and the European Union gave approval Feb. 13 to Google’s $12.5 billion takeover of Motorola Mobility despite warnings from consumer groups that the acquisition would ultimately lead to increased prices for smart phones and tablets.

Despite consumer group objections, the European Commission said its analyses indicated that Google would not use its purchase of Motorola Mobility to deny the use of its operating system Android to competitors of Motorola. But the EU antitrust authority also warned it will be monitoring Google to ensure it does not misuse some of the 17,000 patents it will gain with the purchase. Simultaneously, the U.S. Department of Justice concluded that the proposed acquisition did not raise substantial competition concerns.

“After a thorough review of the proposed transactions, the Antitrust Division has determined that each acquisition is unlikely to substantially lessen competition and has closed these ... investigations,”the DOJ stated in a statement announcing the end of its investigation into the proposed acquisition.

European regulators offered a similar rationale for their decision.

“Upon careful examination this transaction does not itself raise competition issues,” said European Competition Commissioner Joaquin Almunia. “Moreover the transaction would not significantly modify the market situation in respect of operating systems and patents for smart phones and tablets.

“Our investigation showed Android helps to drive the spread of Google’s other services,” the Commission added. “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 Google would restrict the use of Android solely to Motorola, which is a minor player in the EU as compared to operators such as Samsung and HTC.”

The EC also said it examined whether Google would be in a position to use Motorola’s standard essential patents to obtain preferential treatment for its services, including search capabilities and advertising.

No Material Change Seen.

“The Commission found that Google already had many ways in which to convince customers to take up its services and that the acquisition of Motorola would not materially change this,” the EU executive body said.

Google welcomed the decision and said it was a key development in allowing it to “supercharge” Android.

“This is an important milestone in the approval process and it moves us closer to closing the deal,” Google said in a statement. “We are now just waiting for decisions from a few other jurisdictions before we can close this transaction.

“As we outlined in August, the combination of Google and Motorola Mobility will help supercharge Android,” Google added.

Google still needs antitrust approval in China and India.

Consumer Groups Object.

In January the U.S.-based Consumer Watchdog’s Privacy Project wrote to the European antitrust authority urging that the deal be rejected. In a letter, the group said that approval to buy Motorola Mobility would give Google the ability to establish “unprecedented dominance in virtually all aspects of the mobile world—manufacturing, operating systems, search and advertising. It would be a virtually unstoppable juggernaut. We urge you to block the deal.”

The approval comes at a time when legal disputes over patents for smart phones and tablets are intensifying. Recently the EC opened an investigation over possible illegal action by Samsung concerning commitments it made for making available its patents that are considered vital to implementing EU telecommunication standards for high-speed mobile phones.

Meanwhile, Apple Corp. and Samsung as well as HTC are engaged in legal battles over patents in different parts of the world.

The U.S. Department of Justice statement is available at http://www.justice.gov/opa/pr/2012/February/12-at-210.html.