The European Commission clears acquisition of Motorola Mobility by Google

The European Commission approved under the EU Merger Regulation the proposed acquisition of Motorola Mobility, a developer of smartphones and tablets, by Google, the world's largest internet search and search advertising company and developer of Android.

The European Commission approved under the EU Merger Regulation acquisition of Motorola Mobility by Google. The Commission approved the transaction mainly because it would not significantly modify the market situation in respect of operating systems and patents for smartphones and tablets. Google is a provider of internet search and online advertising services. It also provides a number of additional online services and software products. Google also develops and makes available an open source mobile operating system called Android, and is the leading member of the Open Handset Alliance ("OHA"), an alliance of 84 mobile and technology companies. Motorola is a supplier of mobile devices, TV set-top boxes (STBs), end-to-end video solutions and cable broadband access solutions.

The Commission examined whether Google would be in a position to use Motorola’s standard essential patents to obtain preferential treatment for its services, including search and advertising. The investigation carried out by the Commission found that Google already had many ways in which to incentivise customers to take up its services and that the acquisition of Motorola would not materially change this.

All smartphones and tablets need an operating system. The Commission's investigation showed Android helps to drive the spread of Google's other services. Consequently, given that Google's core business model is to push its online and mobile services and software to the widest possible audience, it is unlikely that Google would restrict the use of Android solely to Motorola, a minor player in the European Economic Area (EEA), as compared to operators such as Samsung and HTC. Furthermore, all smartphones need to adhere to certain telecommunications standards such as 3G or 4G/LTE. Motorola, as some other market participants, holds patents that are essential for these standards to operate. Access to such "standard essential" patents is therefore crucial for players on the smartphone market. However, the Commission concluded that the proposed transaction would not significantly change the existing market situation in this respect.