European regulators have given Google the green light to take over Motorola Mobility.
The US$12.5 billion deal faced strong opposition from open-source andconsumer rights advocates, but the European Commission announced onMonday that the acquisition could go ahead, without conditions.
By buying Motorola Mobility, Google will gain control of around17,000smartphone patents, including standard essential patents, but theCommission approved the transaction after its investigation showed thatit would not significantly change the market situation in respect ofoperating systems and patents for smartphones.
Essential patents, such as 3G or GSM (Global System forMobileCommunications), are those which are required in order for smartphonesto operate according to developed industry standards. Because they arecrucial for all market players, standard-setting organizations requirethe holders of standard essential patents to license them to anyinterested third parties on fair, reasonable and non-discriminatory(FRAND) terms. The European Commission also expects strict adherence toFRAND principles.
In approving the merger, Competition Commissioner Joaquín Almuniawarned that the Commission “will continue to keep a close eye on thebehavior of all market players in the sector, particularly theincreasingly strategic use of patents.” Speaking in Paris on Friday, healso said that he was prepared to use all measures available, such asfines of up to 10 percent of a company’s global turnover, to enforcethe rules. The Commission is already involved in a formal investigationof Samsung Electronics for misuse of essential patents in its battlewith Apple.
U.S. Justice Department approvalstill pending
“Standardization processes must be fair and transparent, so that theyare not in the hands of established firms willing to impose theirtechnologies. But it is not enough. We must also ensure that, once theyhold standard essential patents, companies give effective access onfair, reasonable and non-discriminatory terms,” said Almunia.
Google has pledged to license its newly acquired Motorola patents onFRAND terms. However, in a letter to 15 standards bodies, Google alsolisted the exceptions for when it would abandon this promise and wouldcontinue to pursue injunctions.
Patent expert Florian Mueller says the letter changes nothing: “Googleis basically saying that it will do exactly what Motorola is alreadydoing now.”
The approval news comes as mobile phone leaders Apple, Microsoft,Google and Samsung struggle for dominance with countless court casescurrently ongoing over alleged patent violations. Google’s Androidsmartphone operating system dominates the mobile market with a 38percent share compared to Apple iPhone’s 27 percent.
In its review, the Commission cooperated with a number of competitionauthorities, in particular with the U.S. Department of Justice, whichis expected to give its own approval later this week.
