U.S. DOJ clears Google’s acquisition of Motorola Mobility and other transactions involving standards-essential patents
On 13 February 2013 the U.S. Department of Justice (“DOJ”) announced the closing of investigations concerning the acquisition of Motorola Mobility Holdings Inc. (“Motorola Mobility”) by Google Inc. (“Google”).
The DOJ focused the investigation on whether Google could use standards-essential patents acquired through the transaction to foreclose competition or raise rivals’ costs. The DOJ concluded that the transaction is not likely to substantially lessen competition in such a way. According to the DOJ, even though Google may have the ability to hold up its rivals and harm competition, the DOJ determined that the transaction will not materially change the competitive situation, because Motorola Mobility already has an “aggressive history to capitalize on its intellectual property.” The DOJ made special note of Google’s licensing commitments concerning its policy of licensing the acquired standards-essential patents; because of the ambiguity in these commitments, the DOJ remains concerned about how Google may exercise its patents in the future. Thus, the DOJ stated that it will continue to monitor how standards-essential patents are exercised in the wireless device industry.
The DOJ simultaneously announced the closing of investigations into two other transactions involving patents: (i) a partnership to acquire patents of Nortel, and (ii) Apple’s acquisition of patents from CPTN that originate from Novell (See Newsletter 3/2011 p. 6 for the clearance of the creation of CPTN by DOJ). The DOJ also determined, with respect to these transactions, that they would not materially change the competitive situation, and low market shares of the acquirers would not even provide an incentive to exercise the patents to foreclose competition. The DOJ also found it important that licensing commitments were provided by the acquirers with respect to the use of the patents in the wireless industry and against Linux-systems.
On the same day as the U.S. DOJ announcement, the European Commission also cleared the acquisition of Motorola Mobility by Google, following an analysis of foreclosure concerns similar to those undertaken by the DOJ. The decision contains extensive discussion of the analysis of these foreclosure concerns as well as the general competitive concerns raised by abuse of standards-essential patents. The European Commission also considered and cleared concerns about Motorola Mobility using the standards-essential patents to engage in exclusionary practices to strengthen its market position in mobile search and advertising. [Juha Vesala]