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    DOJ Grants Google Approval For Motorola Buy

    By
    Clint Boulton
    -
    February 14, 2012
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      Hours after the European Commission OK’d Google’s (NASDAQ:GOOG) $12.5 billion bid for Motorola Mobility (NYSE:MMI), the Department of Justice followed suit, granting the search engine permission to buy the Android OEM.

      The DOJ also extended its blessing to the controversial acquisition of Nortel patents by Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT) and Research In Motion (NASDAQ:RIMM), a group that called itself Rockstar Bidco.

      The DOJ’s move clears the way for Google to consummate the deal it inked last August to acquire Motorola, a deal the search engine said was designed to “super-charge” its Android operating system ecosystem.

      The DOJ concluded the Motorola acquisition and patent purchases would not lessen competition in the mobile market.

      However, the regulator also echoed the concerns of its European counterpart about whether the acquirers would abuse the licensing structure of standard essential patents (SEPs) owned by Motorola and Nortel. Motorola commands more than 17,000 patents, while Nortel has more than 6,000 patents.

      The Commission and DOJ were concerned Google, Microsoft, Apple and RIM could wield some of the SEPs to boost rivals’ costs to license them or otherwise impede competition.

      While Google, Apple and Microsoft have all claimed they would license SEPs under fair, reasonable and non-discriminatory (FRAND) terms, the DOJ is concerned by Google’s murkier position on SEP licensing.

      Google said last week that it reserves its right to “seek any and all appropriate judicial remedies against counterparties” that refuse to license its FRAND patents.

      Google essentially left the option open to levy injunctions to those who did not accept royalty demands, which include demanding 2.25 percent royalties for each device Apple and others sell. The DOJ noted in its statement:

      “Google’s commitments have been less clear. 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 SEPs 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.”

      To that end, the DOJ pledged to continue to monitor the use of SEPs in smartphones and tablets and said it will “not hesitate to take appropriate enforcement action to stop any anti-competitive use of SEP rights.”

      Google is paying $40 per share for Motorola;

      that’s a 63 percent premium for the struggling maker of Android phones, tablets, and set-top box and other IP video gear. Many industry watchers believed Google simply targeted Motorola for its massive patent war chest.

      Google’s bid came one month after Apple, Microsoft and RIM agreed last July to pay $4.5 billion for Nortel’s patents.

      Clint Boulton

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