Google Motorola Deal Approved

Google’s $12.5 billion offer to acquire Motorola Mobility was approved on Monday by the U.S. Department of Justice and the European Commission.

The Department of Justice also said it will allow two related deals: an offer from Apple, Microsoft, and Research in Motion to buy Nortel’s patent portfolio and Apple’s bid to acquire certain Novell patents.

“The [Antitrust] division concluded that the specific transactions at issue are not likely to significantly change existing market dynamics,” the Justice Department said.

The European Commission also approved the Motorola deal because regulators did not deem it to be a threat to competition, though there was some concern expressed about how Google might use its strengthened patent portfolio.

“We have approved the acquisition of Motorola Mobility by Google because, upon careful examination, this transaction does not itself raise competition issues,” said Joaquin Almunia, Commission vice president in charge of competition policy. “Of course, the Commission will continue to keep a close eye on the behavior of all market players in the sector, particularly the increasingly strategic use of patents.”

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Google vice president and deputy general counsel Don Harrison expressed satisfaction with the European Commission decision in a blog post, which was amended in the afternoon after the Department of Justice announced its decision.

Google’s interest in Motorola is first and foremost because of the phone maker’s patents. Many of the major technology companies operating in the mobile market are suing each other for patent infringement, or threatening such suits to obtain patent licensing fees. On Friday, Apple fired the latest salvo in its patent war against Motorola Mobility, alleging breach of contract in an effort to halt a lawsuit that Motorola Mobility brought against Apple in Germany.

Google CEO Larry Page said last August that his company’s bid for Motorola Mobility “will increase competition by strengthening Google’s patent portfolio, which will enable us to better protect Android from anti-competitive threats from Microsoft, Apple, and other companies.”

Google also is apparently serious about becoming a maker of hardware. Last year when the Motorola Mobility deal was announced, many analysts speculated that Google intended to spin off Motorola’s hardware business so that Google’s Android hardware partners, such as Samsung, would not see Google as a potential competitor. But lately, it looks more and more like Google wants to emulate Apple by controlling both the software and hardware layers in its products.

Google is investing over $120 million to build a Google Experience Center at its Mountain View, Calif., headquarters to showcase future products developed under its Android@Home initiative.

Google suggested that workplace renovation goes hand-in-hand with product innovation. “Just as we continuously work to improve our products, it’s important to iterate on our workspace to keep us productive,” a company spokesperson said via email. “That’s why we are adding additional meeting and work space to our campus in Mountain View.”

Although Google isn’t yet acknowledging its emerging interest in hardware, prototypes of what’s believed to be a future Google music streaming device are presently being tested with the blessing of the Federal Communications Commission.

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