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Google-Motorola Mobility deal approved by U.S. regulators

February 13, 2012|By Jessica Guynn
  • Google has won approval from the U.S. Department of Justice for its $12.5-billion acquisition of Motorola Mobility.
Google has won approval from the U.S. Department of Justice for its $12.5-billion… (Virginia Mayo )

Google Inc. may be on the verge of closing the biggest deal in its 13-year history -- one that will escalate competition with Apple Inc.

Its $12.5-billion acquisition of Motorola Mobility got approval from U.S. and European antitrust regulators Monday, bringing it significantly closer to manufacturing phones, tablets and other consumer devices such as a home entertainment system for the first time.

A Google spokeswoman declined to comment but said the Internet search giant hopes to close the deal early this year.

Although officials in Washington and Brussels concluded that the Motorola deal would not stifle competition, U.S. and European regulators warned they would monitor to make sure none takes place.

Google is looking to Motorola's more than 17,000 patents to help shield it in the escalating patent battles surrounding its Android operating system. Google has pledged to license Motorola patents if the deal is approved. There is growing concern that patent holders are increasingly using their portfolios as bludgeons to stop other companies from using smartphone technology.

"The division will not hesitate to take appropriate enforcement action to stop" anticompetitive behavior, the U.S. Department of Justice said in a written statement.

Google still needs to clear regulatory hurdles in China, Taiwan and Israel before it can close the Motorola deal.

"This is an important milestone in the approval process," Don Harrison, Google's deputy general counsel, wrote in a blog post announcing the European Commission approval.

The deal faced heavy antitrust scrutiny in Europe and the U.S. Regulators continue to investigate whether Google abuses its dominance in Internet search in a way that harms competitors and consumers.

The pairing could benefit both companies. Motorola Mobility has struggled to keep up with Apple’s iPhone and other smartphones from rivals such as Samsung. And Google is looking to get search and its other services on as many devices and in as many consumers' hands as possible, said BGC Partners analyst Colin Gillis.

"What this means: Get ready for inexpensive hardware," Gillis said. "Google is about to chase a whole new business model. It’s going to get hardware out to consumers at low to no cost and make it up in services, because the only way to beat Apple is on price."

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