Justice Department Clears Google's $12.5 Billion Motorola Deal

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The U.S. Department of Justice's Antitrust Division on Monday gave the go-ahead for Google's proposed acquisition of Motorola Mobility, while noting that "how Google may exercise its patents in the future remains a significant concern."

In addition, the DOJ antitrust division Monday cleared the acquisitions by Apple, Microsoft and Research in Motion of certain Nortel Networks patents and the acquisition by Apple of certain Novell patents.

In August 2011, Google announced its plans to acquire Motorola Mobility, a key supplier of set-tops and other technology to the cable industry, for $12.5 billion in cash. The deal was driven primarily by Google's desire to obtain the latter's portfolio of more than 17,000 patents to protect its Android mobile operating system from litigation by rivals like Apple and Microsoft.

The DOJ said that Google's statements regarding its position on licensing key patents on fair, reasonable and nondiscriminatory (FRAND) terms "were more ambiguous" than those from Apple and Microsoft.

In particular, Google has said that its policy is to refrain from seeking injunctive relief for patent infringement 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," the DOJ's antitrust division noted.

The agency's antitrust division determined that the acquisition of the patents by Google "did not substantially lessen competition, but how Google may exercise its patents in the future remains a significant concern," the DOJ said. "The division's continued monitoring of how competitors are exercising their patent rights will ensure that competition and innovation are unfettered in this important industry."

Earlier Monday, the European Commission also approved the Google-Motorola deal, while the regulatory agency said it would keep "a close eye" on the sector. The DOJ said that during the course of its review it cooperated closely with the European Commission.

"After a thorough review of the proposed transactions, the Antitrust Division has determined that each acquisition is unlikely to substantially lessen competition and has closed these three investigations," the agency said in a statement. "In all of the transactions, the division conducted an in-depth analysis into the potential ability and incentives of the acquiring firms to use the patents they proposed acquiring to foreclose competitors.... The division concluded that the specific transactions at issue are not likely to significantly change existing market dynamics."

The DOJ, as part of its investigation, said it also had discussions with the Australian Competition and Consumer Commission, Canadian Competition Bureau, Israeli Antitrust Authority and the Korean Fair Trade Commission. In connection with the investigations relating to the Nortel patent assets, the division worked closely with states of New York and California and with the Canadian Competition Bureau.

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