US, EU Clear Google's $12.5B Motorola Mobility Bid

By: Associated Press Email
By: Associated Press Email

SAN FRANCISCO (AP) - Google's $12.5 billion acquisition of
cellphone maker Motorola Mobility have won approvals from U.S. and
European antitrust regulators, moving Google a major step closer to
completing the biggest deal in its 13-year history.

The blessings mean Google Inc. just needs to clear a few more
regulatory hurdles before it can take control of Motorola Mobility
Holdings Inc. and expand into manufacturing phones, tablet
computers and possibly other consumer devices for the first time.

Google is counting on Motorola Mobility's more than 17,000
patents - a crucial weapon in an intellectual arms race with Apple,
Microsoft and other rivals to gain more control over smartphones,
tablets and other mobile devices.

The Justice Department ended a six-month review of the deal
after concluding it won't stifle competition in the mobile device
market. European regulators reached the same conclusion.

In granting its approval, though, the European Union raised
concerns about Motorola's aggressive enforcement of its patents. EU
Competition Commissioner Joaquin Almunia said regulators will
"keep a close eye on the behavior of all market players in the
sector, particularly the increasingly strategic use of patents."

Google still needs government approvals in the China, Taiwan and
Israel.

The main concerns are believed to revolve around Google's
Android operating system, free software that now powers more than
250 million mobile devices made by a variety of manufacturers,
including Motorola Mobility. Competition could be hurt if Google
gives Motorola Mobility the most advanced versions of Android or
withholds the mobile software from other cellphone makers.

Google, though, has pledged to make Android available to all its
mobile partners. Even if Google were to discriminate, cellphone
makers still could rely on mobile software from Microsoft Corp.,
Research in Motion Ltd. and Hewlett-Packard Co., among others.

Almunia said in a statement Monday that EU regulators didn't
believe the deal would diminish competition.

"This is an important milestone in the approval process and it
moves us closer to closing the deal," Don Harrison, Google's
deputy general counsel wrote in a blog post

Without setting a specific timetable, Google has expressed
confidence it will be able to take over Motorola Mobility early
this year.

It already has been six months since Google announced plans to
buy Motorola Mobility, which has been struggling as Apple's iPhone
and other smartphones made by rivals such as Samsung Electronics
overshadowed its line of products.

The regulatory reviews in U.S. and Europe have come as
regulators also have been conducting a broader inquiry into whether
Google has been abusing its dominance in Internet search to hobble
its rivals. Those investigations are still ongoing.

Getting China's approval of the Motorola Mobility deal may prove
to be the biggest hurdle. Google's relationship with China's ruling
party has been on shaky ground since the company blamed hackers in that country for breaking into its computers two years ago. The
breach prompted Google to move its Internet search engine from
mainland China in protest of laws requiring some results to be
censored.

Motorola Mobility's $12.5 billion price is more than the
combined amount that Google has paid for the 185 other acquisitions
that it has completed since going public in 2004.

The EU decided to treat its examination of Google's Motorola
Mobility acquisition separately, even as it raised concerns about
Motorola's aggressive patent enforcement.

Earlier this month, the Commission launched an investigation
into whether Samsung is using some of its key patents to hinder
competitors. Like Motorola, Google is also locked in a legal battle
with Apple Inc., claiming the maker of the iPad and iPhone is using
some of its patents without permission. At the time, Almunia's
office indicated that similar investigations against over companies
may follow.

The European regulators see no danger that Google will prevent
other device makers from using its popular Android operating system
after the takeover.

"Android helps to drive the spread of Google's other
services," the Commission said. "Given that Google's core
business model is to push its online and mobile services and
software to the widest possible audience, it is unlikely that
Google would restrict the use of Android solely to Motorola,"
which only has a small market share in Europe.

Google's stock rose $6.29, or 1 percent, to close Monday at
$612.20. Motorola Mobility's gained 18 cents to $39.63. Google is
based in Mountain View, Calif., while Motorola Mobility has its
headquarters in Libertyville, Ill.


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