With hesitation, regulators in both the United States and European Union approved Google’s $12.5 billion acquisition of Motorola Monday paving the way for the search giant to potentially manufacture its own phones.
In a press release announcing approval of the deal, the Department of Justice stated that Google’s potential approach to FRAND (fair reasonable and non discriminatory licensing) raised “significant concern” with the department as Google was “more ambiguous” than its rivals in affirming its commitments to standard practices.
“Google’s commitments have been less clear,” the DOJ explained in the statement.
“In particular, Google has stated to the IEEE and others on Feb. 8, 2012, that its policy is to refrain from seeking injunctive relief for the infringement of standard essential patents against a counter-party, but apparently only for disputes involving future license revenues, and only if the counterparty: forgoes certain defenses such as challenging the validity of the patent; pays the full disputed amount into escrow; and agrees to a reciprocal process regarding injunctions.”
“Google’s statement therefore does not directly provide the same assurance as [Apple's and Microsoft's] statements concerning the exercise of its newly acquired patent rights,” said the DOJ.
The DOJ concluded that the acquisition of Motorola Mobility’s patent portfolio by Google would not substantially lessen competition.
The DOJ made a commitment in the statement to continue to monitor the use of standard essential patents in the wireless device industry, with particular zeal in the smartphone and tablet sector.
Officials in the European Union also had some concerns with the deal.
“We have approved the acquisition of Motorola Mobility by Google because, upon careful examination, this transaction does not itself raise competition issues,” stated Joaquín Almunia, E.U. Competition Commissioner Joaquin Almunia in a press release. “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.”
“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,” Commissioner Almunia told Reuters.
The DOJ approved a separate patent deal later on Monday that allowed Google’s chief competitors, namely Microsoft, RIM, and Apple, to acquire 6,000 patents from the now-defunct Canadian telecom manufacturer Nortel Networks. Officials also allowed Apple’s acquisition of some patents formerly held by Novell.
“The combination of Google and Motorola Mobility will help supercharge Android,” Don Harrison, Google’s vice president and deputy general counsel, posted on the company’s blog. “It will also enhance competition and offer consumers faster innovation, greater choice and wonderful user experiences.”