European Commission postpones Google-Motorola decision


The European Commission has temporarily suspended its initial January 10, 2012 deadline to approve or disapprove Google’s pending merger with Motorola Mobility. According to Bloomberg, EC spokesperson Amelia Torres says the European Commission’s antitrust authority will restart the review process after it has obtained additional documents regarding the transaction. In addition, the commission has published a notice in the European Law Journal inviting “interested third parties” to submit statements and opinion on how the commission should handle the proposed merger.

Although Google spokespeople have characterized the suspension as a routine request for additional information, Google’s move to acquire Motorola Mobility could run afoul of antitrust authorities in both Europe and the United States. By acquiring Motorola Mobility, Google puts itself in the position of not only making the world’s top-selling mobile operating system (Android) and many of the services that back it up (Google Maps, Gmail, Google Web search, etc., as well as mobile advertising services), but also physical handsets. That could give Motorola a substantial advantage over handset makers like HTC and Samsung in the Android business.

Google will not put Google in the Android handset business, and that Google will operate Motorola Mobility as if it were an independent third-party handset maker, with no special privileges or inside track. Instead, Google has characterized the deal as a move to “protect” Android by acquiring Motorola’s portfolio of more than 17,000 patents. Android is currently the subject of ferocious patent litigation, both directly from Oracle and indirectly from Apple (which is suing Samsung, HTC, and Motorola). If Google’s acquisition of Motorola goes through, Google will become a first party to patent infringement litigation over Android. Android is also under patent pressure from Microsoft, which is cutting deals with Android device makers to protect them from patent infringement suits, should Microsoft get around to suing over Android. Microsoft claims more than half of all Android devices are now covered by patent licensing agreements with Microsoft.

The proposed merger of Google and Motorola Mobility must also be approved by the U.S. Justice Department, which is still considering the matter and has not indicated any disposition on the matter. If the Justice Department believes the deal would harm companies like Samsung and HTC or reduce competition in the smartphone marketplace, it could impose conditions on the merger or, as in the case of T-Mobile and AT&T, sue to block the deal on anticompetitive grounds.

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