Bloomberg News

Google Wins European Union Approval to Buy Motorola Mobility

February 14, 2012

(Updates with comment from companies starting in fifth paragraph.)

Feb. 13 (Bloomberg) -- Google Inc., the biggest maker of smartphone software, won European Union approval for its $12.5 billion acquisition of Motorola Mobility Holdings Inc. to arm itself with patents to protect the Android operating system.

While the European Commission said Google’s planned purchase of Motorola Mobility didn’t raise competition concerns, the EU’s antitrust chief Joaquin Almunia said he’s “concerned” by phone makers using patent litigation to block rivals.

“We are aware of the increasingly strategic use of patents in the sector and are vigilant,” Almunia said in an e-mailed statement. “We can avoid a continuation of this patent war,” he told reporters in Brussels.

Google cited patent disputes as key to its agreement to buy Motorola Mobility and its trove of 17,000 patents. Apple Inc., maker of the iPhone, and Microsoft Corp., developer of Windows Phone software, have targeted phones that run on Google’s best- selling Android system, including handsets built by Motorola Mobility, Samsung Electronics Co. and HTC Corp., in lawsuits worldwide.

The EU’s approval is “an important milestone in the approval process,” Don Harrison, Google’s deputy general counsel, said in a blog post. He said the company was waiting for decisions from a few other jurisdictions before it could close the combination to “help supercharge Android.”

Motorola Mobility is “pleased with the progress” and looks “forward to clearance in other jurisdiction,” Jennifer Weyrauch-Erickson, a San Diego, California-based spokeswoman for the company, said in an e-mailed statement.

Android Software

The commission said its probe showed that Google was unlikely to block rivals’ access to Android software or to use Motorola Mobility’s standard-essential patents to give an unfair boost to its search and advertising services.

Google pledged last week to honor Motorola Mobility’s commitments to license patents that are part of industry- standard technology.

Google Chief Executive Officer Larry Page said in August the company’s bid for Libertyville, Illinois-based Motorola Mobility would help protect Android against “anticompetitive attacks” from Apple and Microsoft.

‘Launching Injunctions’

Samsung is under investigation by EU antitrust regulators over whether it broke a commitment to license any standard essential patents for phones on “fair, reasonable and non- discriminatory terms.” The EU said its probe was triggered by Samsung’s claims in European courts that rivals infringed its patents.

Almunia said he didn’t rule out future antitrust probes into companies using lawsuits to block rivals.

Owners of standard-essential patents shouldn’t abuse their market power by “launching injunctions,” he told reporters. Still, he said he can’t oblige them to withdraw such requests to block product sales.

“If they are using injunctions without a previous offer of patent licensing” on fair, reasonable and non-discriminatory terms, “I would consider that they are abusing their market power,” Almunia said. “We are trying to establish the rules of the game.”

Motorola Mobility, Samsung, Apple and Microsoft are involved in numerous patent lawsuits in Europe as demand for smartphones and tablets soar. Global smartphone shipments surged 55 percent in the fourth quarter as demand for Apple’s iPhone 4S, International Data Corporation said Feb. 6.

EU antitrust regulators are separately investigating Google over claims it discriminated against other services in its search results and stopped some websites from accepting rival ads. Microsoft and shopping-comparison site Foundem are among companies that asked the agency to examine the Mountain View, California-based search engine.

The U.S. Justice Department is expected to give antitrust approval for the Google-Motorola Mobility deal this week, according to two people familiar with the matter.

--Editors: Peter Chapman, Nicholas Turner

To contact the reporter on this story: Aoife White in Brussels at awhite62@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net


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