Google Wins U.S. Antitrust Approval to Buy Motorola Mobility
The acquisition of Libertyville, Illinois-based Motorola Mobility gives Google, the biggest maker of smartphone software, more than 17,000 additional patents in the largest wireless- equipment deal in at least a decade, according to data compiled by Bloomberg.
The U.S. Justice Department said that the Motorola Mobility patent purchases as well as two separate deals it approved yesterday wouldn’t hurt competition in the mobile-phone industry. Google earlier won approval for the purchase in the European Union while the company is awaiting regulatory clearance in China and Israel.
“The specific transactions at issue are not likely to significantly change existing market dynamics,” according to a Justice Department statement.
Google, based in Mountain View, California, cited reinforcing its defenses in patent litigation as the prime motive for buying Motorola Mobility and its patents.
Lawsuits Over Android
Apple, maker of the iPhone, and Microsoft Corp. (MSFT), developer of Windows Phone software, have alleged patent infringement in lawsuits around the world over phones that run on Google’s Android system, including handsets built by Motorola Mobility, Samsung Electronics Co. and HTC Corp. (2498)
In a blog posting on the European Union approval, Don Harrison, Google’s vice president and deputy general counsel, said the combination of Google and Motorola Mobility will “supercharge Android” and “enhance competition.”
Niki Fenwick, a Google spokeswoman, said in a statement the company hopes to complete the transaction early this year.
The deals approved by the department are part of a growing trend of technology companies buying patents they can use to defend themselves against intellectual-property suits. Google’s Chief Executive Officer Larry Page said in August that the company’s bid for Motorola Mobility would help protect Android against “anticompetitive attacks” from Apple and Microsoft.
The Motorola Mobility acquisition would make Google a competitor to the other handset makers that make Android devices.
The patents include technology essential to the mobile- device industry, including location services, antenna designs and touch-screen motions.
A plan by a consortium led by Microsoft and Apple to buy Nortel Network Corp. patents also received antitrust approval yesterday, according to the Justice Department. The $4.5 billion acquisition will give the consortium, which includes Research in Motion Ltd., Sony Corp. (6758), Ericsson AB and EMC Corp (EMC)., control of more than 6,000 patents and applications that cover wireless technologies.
The department also said it approved Apple’s acquisition of some Novell Inc. (NOVL) patents.
During the Justice Department investigation of the patent deals, the agency said it became concerned with the increasing tendency of patent holders filing lawsuits to stop other companies from using their key smartphone technology. The department said it will continue to examine companies such as Google that haven’t sworn off the practice.
In its statement, the department said it “will not hesitate to take appropriate enforcement action to stop any anticompetitive use” of essential technology.
In approving the Google-Motorola Mobility deal, Joaquin Almunia, the European Union’s antitrust chief, told reporters he wouldn’t rule out future antitrust investigations into companies using lawsuits to block rivals.
Companies shouldn’t abuse their market power by “launching injunctions,” he said.
The EU is investigating whether Samsung Electronics (005930) Co. broke a commitment to license its smartphone patents to rivals on “fair, reasonable and non-discriminatory terms.”
Google said in a Feb. 8 letter that it would still consider seeking court injunctions if it couldn’t resolve “standard compliant” patent disputes. Google wrote the letter to answer questions of EU regulators.
Microsoft, of Redmond, Washington, and Cupertino, California-based Apple have said they won’t deny other companies from using their technology if they have previously signed an agreement to that effect.
“We are encouraged that the U.S. Department of Justice and the European Commission both have raised concerns about the misuse of standard-essential patents and Google’s failure to address this issue in a satisfactory way,” said Brad Smith, executive vice president and general counsel at Microsoft, in a statement.
Companies often sign contracts agreeing to license essential technology for a reasonable price as a way to ensure steady improvement in the technology.