European Union Approves Google-Motorola Deal

Now that the EU has approved Google’s $12.5 billion deal, eyes turn to the Department of Justice and other international regulators

The European Union on Monday approved Google’s proposed $12.5 billion acquisition of Motorola Mobility, clearing one of the major antitrust hurdles to the blockbuster deal.

“Upon careful examination, this transaction does not itself raise competition issues,” Joaquín Almunia, Commission Vice President in charge of competition policy, said in a statement. “Of course, the Commission will continue to keep a close eye on the behaviour of all market players in the sector, particularly the increasingly strategic use of patents.”

Don Harrison, Vice President & Deputy General Counsel at Google, called the European approval “an important milestone in the approval process” on Google’s blog.

Google still needs the consent of various international regulators, as well as the United States Department of Justice, though reports last week indicated that the DOJ was set to approve it as well. China, where Motorola has a manufacturing  is among the countries yet to approve the deal, 

Google makes most of its money from search advertising and has long been a software company, but the acquisition of Motorola, a major manufacturer of mobile phones, would move it into the hardware business.

There was some fear that in buying Motorola, Google would show preferential treatment to those phones as compared to those of other manufacturers.

The commission did not find that was a major threat.

Also Read: Behind Google's $12.5B Motorola Gamble: Patents, Patents, Patents

One of the main reasons Google is pursuing the deal is the wealth of patents Motorola controls – more than 17,000.

Again, there is concern about whether Google’s acquisition of so many patents would inhibit competition. Companies like Apple and Samsung are presently engaged in patent-related legal battles as they try to prevent others from releasing similar products.

The commission recognized that that was a serious concern, one it would continue to monitor.

“This merger decision should not and will not mean that we are not concerned by the possibility that, once Google is the owner of this portfolio, Google can abuse these patents, linking some patents with its Android devices. This is our worry,” Almunia told reporters