Department Of Justice Approves Google’s Bid For Motorola (NASDAQ: GOOG)
U.S. and European antitrust regulators have granted their approval for Google’s $12.5 billion bid to buy cellphone maker Motorola Mobility. The Justice Department did not find any evidence that Google’s purchase of Motorola Mobility would lessen competition in the mobile device market. This allows Google to move a major step closer to completing the biggest deal in its 13-year existence.
Google originally announced the deal six months ago. Don Harrison, Google’s deputy general counsel, wrote in a blog post that the deal will “enhance competition and offer consumers faster innovation, greater choice and wonderful user experiences.” If Google can also overcome regulatory hurdles in China, Taiwan and Israel, it can take control of Motorola Mobility Holdings Inc. and begin its expansion into manufacturing phones, tablet computers and other consumer devices. Government approval in China seems to be the biggest stumbling block remaining.
Motorola Mobility holds more than 17,000 patents, a significant amount that can be very beneficial to Google in its intellectual property race with Apple, Microsoft, and other rivals. Each company is maneuvering to gain more control over the market for smartphones, tablets, and other mobile devices. The mobile device market has becoming increasingly important as more people connect to the Internet on smartphones and tablet computers than with desktop and laptop computers.
The European Union raised concerns about Motorola’s aggressive enforcement of its patents. Joaquin Almunia, EU Competition Commissioner, said that regulators will “keep a close eye on the behavior of all market players in the sector, particularly the increasingly strategic use of patents.” The Justice Department also declared its intention to crack down on any sign that mobile patents are being used to stifle competition.
Google’s Android operating system was another concern to regulators. The Android operating system now powers more than 250 million mobile devices made by many different manufacturers, including Motorola Mobility. Regulators worried that competition could be harmed if Google provided Motorola Mobility the most advanced versions of Android or decided to withhold the software from other mobile device makers.