Google’s proposed acquisition of mobile phone giant Motorola won approval from the European Commission today, leaving the U.S. Justice Department as the last major hurdle for the $12.5 billion deal.
A major motivation for the deal is Motorola’s large patent portfolio. The European clearance comes less than a week after Google promised publicly that it wouldn’t misuse Motorola’s patent portfolio to extract unreasonable licensing fees for patents deemed “standard-essential.”
“We have approved the acquisition of Motorola Mobility by Google because, upon careful examination, this transaction does not itself raise competition issues,” said EU Competition Commissioner Joaquín Almunia 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.”
The Wall Street Journal reports that a U.S. Justice Department decision on the case could come as early as this week.
The issue of licensing for “standard-essential” patents has been in the spotlight as a result of a case in which Motorola is seeking as much as 2.25 percent of sales from Microsoft Windows, Xbox and other patents that use the H.264 and 802.11 video and WiFi standards.
Google told Bloomberg News last week that it would license Motorola’s standard-essential patents on fair, reasonable and non-discriminatory (FRAND) terms.
Microsoft went further in its own statement last week, saying it will not only make standard-essential patents available on fair and reasonable terms, but also that it “will not seek an injunction or exclusion order against any firm on the basis of those essential patents.”
Update: The WSJ quotes Almunia speaking to reporters: ”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.”
Microsoft general counsel Brad Smith says in a statement: “We are encouraged by the European Commission’s expression of serious concern around the misuse of standard-essential patents and the consequences to competition and to Internet users worldwide. Google’s letter sent last week to standards bodies only intensified these concerns, and we welcome the Commission’s scrutiny of Motorola’s past and Google’s future conduct related to standard-essential patents.”