Tuesday, February 14, 2012

Google says European Commission has approved Motorola Mobility acquisition

Search giant Google has today announced that its planned acquisition of Motorola Mobility has been approved by the European Commission. The approval has been posted to the Commission’s site here and says that it approved the merger largely because it will not “significantly modify the market situation in respect of operating systems and patents for these devices.”

“This is an important milestone in the approval process and it moves us closer to closing the deal,” said Don Harrison, Google’s  Vice President & Deputy General Counsel. “We are now just waiting for decisions from a few other jurisdictions before we can close this transaction.”

The approval was expected to be granted, as Motorola isn’t a huge player in the European market.

Google announced last August that it had plans to acquire Motorola Mobility, which it said would continue to operate as an independent company. Along with the hardware manufacturing business of the mobile company, Google likely had its eye on its 17,000 patents related to the mobile industry.

While Google’s official position is that it plans to treat all Android vendors the same and that Motorola Mobility will continue to be operated as a separate entity, that’s just politics. Whatever Google’s plans for Motorola, it is going to take time and it likely won’t happen before an acquisition is finalized.

While there is still no guarantees that Google will assume a more direct control of Motorola Mobility in the future, it is seeming increasingly unlikely that it has purchased the company just for its patents. Even Eric Schmidt has himself stated “We did it for more than just patents. The Motorola team has some amazing products.”

Motorola’s share of the smartphone market dropped to 12% in the first half of last year, with its Android market share dropping by half from 44% to 22%.

Of note, in light of recent patent disputes, the EC mentions that Motorola’s adherence to licensing patents on fair reasonable and non-discriminatory (FRAND) terms was a crucial part of its agreement approval. This is especially poignant considering that Motorola is currently under attack by Apple for not adhering to standard FRAND practices with regard to its mobile industry patents.

The commission concluded that, if Google wanted to sue to quash the competition, it could sue anyone it liked with the resources (read: patents) already at its disposal and that Motorola’s would not materially alter that.

Earlier this month, a report surfaced that indicates Google’s acquisition will also be approved in the US. It will now need China, Israel and Taiwan to weigh in with approval before it is completed.

No comments:

Post a Comment