MUMBAI: US and European regulators have approved Google Inc's $12.5 billion purchase of Motorola Mobility Holdings Inc. The regulators would monitor web search giant to ensure critical telecommunications industry patents are licensed at fair prices.
Google, whose Android software is the top operating system for Internet-enabled smart phones, declared last year that they would buy phone-maker Motorola for its 17,000 patents and 7,500 patent applications, further boosting their patent portfolio.
The purchase would give Google one of the mobile phone industry's largest patent libraries and hardware manufacturing operations that will allow the giant to develop its own line of smart phones.
The merger is not yet finalize as regulators from China, Taiwan and Israel are still to approve the Google purchase of Motorola. Regulators in China can approve the deal till 20 March or can start a third phase of review. But the acquisition will mark as the most significant foray into the hardware business by an Internet search company.
The antitrust enforcers on both sides of the Atlantic want to prevent companies from gouge rivals when they license patents essential to ensuring different communications devices work together. The legal battles over patents between various technology and Smartphone firms have prompted the European Commission to open an investigation into legal tactics.
The Justice Department said in a statement, "Google's commitments have been less clear, the 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 regulators will be on the lookout for practices that might limit the entry of new Smartphones or new technologies. "If Google makes it more difficult for new technologies to emerge, by locking-in existing licensees of the patents so that it becomes not profitable for them to adopt other technologies, that's the kind of thing that might give rise to antitrust scrutiny down the road," said Shubha Ghosh, a professor at University of Wisconsin Law School who specializes in antitrust law and intellectual property.
Google's move to buy Motorola Mobility came shortly after it tried and failed to buy Nortel's patents, which is now owned by its rival company Apple. The US Federal Trade Commission and the European Union are both investigating Google following accusations it uses in the search market to beat rivals as it moves into related businesses.