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EU, US sign off on Googorola merger

Now the real fun and games begin

As expected, EU competition authorities and the US Department of Justice (DoJ) have cleared Google’s proposed $12.5bn merger with Motorola Mobility.

The merger, initially announced in August, has been on hold while regulators decide if the pool of over 17,000 patents granted to Motorola (and over 7,000 still pending) would be used by Google to unfairly influence the market.

"We have approved the acquisition of Motorola Mobility by Google because, upon careful examination, this transaction does not itself raise competition issues,” said Joaquín Almunia, European Commission vice president in charge of competition policy, in a statement. “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".

The EU has concluded that Google would not try and use the buy to restrict the availability of Android on other handsets, arguing that this would be against Google’s own interests. It also said that it was satisfied that Google would not use Motorola’s patent portfolio to influence the market.

For regulators on both sides of the Atlantic the issue of standard essential patents (SEP) was key to the decision. EU authorities said that Google had satisfied them that the Chocolate Factory would license its technology on fair and equal terms – but US regulators were not so sure.

In a statement, the DoJ said that it was the approving the merger, along with allowing the purchase of Novell’s patent portfolio by a consortium led by Apple and Microsoft, but it was concerned about Google’s attitude to SEP licensing.

“During the course of the division’s investigation, several of the principal competitors, including Google, Apple and Microsoft, made commitments concerning their SEP licensing policies,” said the DoJ. “The division’s concerns about the potential anticompetitive use of SEPs was lessened by the clear commitments by Apple and Microsoft to license SEPs on fair, reasonable and non-discriminatory terms, as well as their commitments not to seek injunctions in disputes involving SEPs. Google’s commitments were more ambiguous and do not provide the same direct confirmation of its SEP licensing policies.”

Regulatory approval of the deal is still pending in China, Taiwan, and Israel, but Google can at least begin the process of integrating the two companies with Monday’s judgments. The company has bet billions that Motorola’s patents will protect it against legal action in the mobile arena – and given that Motorola’s been at the heart of the mobile phone industry ever since introducing the first commercial “mobile” handset, it should have some pretty good stuff.

But Google may also get new problems with Android as part of the deal. Several manufacturers have expressed misgivings, feeling that Google will give Motorola preference with the latest builds and tweaks for Android and leave them playing second fiddle. With Microsoft working hard to woo manufacturers to its Windows Phone platform, Google could have won the takeover battle, but might yet lose the mobile operating system war. ®

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