UPDATE: EU Clears Google Buy Of Motorola Mobility
February 13 2012 - 2:51PM
Dow Jones News
Google Inc.'s (GOOG) acquisition of smartphone and tablet
developer Motorola Mobility Holdings Inc. (MMI) was approved by the
European Union on Monday, but EU antitrust authorities issued a
stern warning that companies should stop using certain types of
patents to sue each other.
"We have approved this acquisition because, upon careful
examination, this transaction does not itself raise competition
issues," EU Competition Commissioner Joaquin Almunia told
reporters. "But we will not abandon monitoring of this issue."
Google said the approval was an important milestone moving the
company closer to closing an acquisition that it says is very
important to its mobile strategy.
"The combination of Google and Motorola Mobility will help
supercharge Android," Google said, referring to its mobile
operating system that is used in many smartphones.
The $12.5 billion transaction would give Google a powerful
arsenal of patents to use in the increasing number of courtroom
battles worldwide over the hotly-contested smartphone market.
The EU is paying special attention to standards-essential
patents, which are necessary to make phones work with an industry
standard, like 3G or WiFi.
Companies who hold these patents must license them to peers on a
fair, reasonable, and non-discriminatory basis--known as "Frand."
This means patents can't be used to stop rivals putting a product
on the market or companies charging extraordinarily high royalty
payments to prevent rivals using the technology.
"Today's decision does not mean the merger clearance blesses all
actions by Motorola in the past or all future action by Google with
regard to the use of standard essential patents," he said, noting
that Motorola has some injunctions in Germany against Apple. In a
recent court judgment, Apple Inc. (AAPL) got the sale of one
Samsung tablet computer blocked in the country.
Earlier this month, the commission started a formal
investigation into whether South Korea's Samsung Electronics Co.
Ltd. (SSNHY, 005930.SE) is using standards-essential patents to sue
rivals including Apple--he said the case is "a priority" today.
Almunia said he had started the case against Samsung because the
company was using injunctions to try and block the sale of Apple's
products, without having first offered to license access to the
standards-essential patents on a Frand basis first--and that he is
ready to do the same against other companies.
Samsung has said it believes the commission will ultimately
conclude the company complies with the rules.
"We are aware of the increasingly strategic use of patents in
the sector and are vigilant," Almunia said.
Almunia said the commission is trying to establish "rules of the
game" for what it called a "patents war" between the various
technology companies.
Almunia said that while companies have written to various
standard-setting organizations, they have promised different levels
of commitment to protecting and licensing the patents, which is a
cause of concern for authorities.
Last week, Google sent letters to dozens of standards
organizations promising that it would offer licenses for Frand
patents in Motorola's portfolio, but in contrast to Apple and
Microsoft Corp. (MSFT) it didn't rule out seeking injunctions
against any potential violators.
The U.S. Justice Department must also rule on the proposed $12.5
billion acquisition, a decision which could also come this
week.
While companies have the right to defend their innovations,
there are limits when the patent in question is part of a standard,
he stressed.
"The commission will continue to keep a close eye on the
behaviour of all market players in the sector," he said.
-By Frances Robinson, Dow Jones Newswires; +32 2 741 1486;
frances.robinson@dowjones.com
--Ian Sherr contributed to this article.
Marcus and Millichap (NYSE:MMI)
Historical Stock Chart
From May 2024 to Jun 2024
Marcus and Millichap (NYSE:MMI)
Historical Stock Chart
From Jun 2023 to Jun 2024