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Competition Law

Analysis - debate - current awareness

13 FEB 2012

Commission approves Google's acquisition of Motorola Mobility

On 13 February the European Commission cleared the proposed acquisition of Motorola Mobility, supplier of smartphones and tablets, by Google, the global leader in internet searching and advertising and developer of Android, a mobile operating system. The proposed transaction was notified to the Commission on 25 November 2011.

Given that all smartphones and tablets require an operating system, as part of the clearance procedure the Commission considered whether Google would be likely to prevent Motorola's competitors from using the Android operating system and thereby distort competition in the market for operating systems and patents for those devices. Upon careful analysis, the Commission concluded that the transaction will not significantly reduce competition in the European Economic Area (EEA) or any substantial part of it: Google's business strategy being to diffuse its online and mobile services and software among the widest possible audience, it is unlikely to restrict the use of Android to Motorola, a minor player in the EEA in comparison with undertakings such as Samsung and HTC.

Smartphones must also adhere to telecommunications standards such as 3G or 4G/LTE. Whilst Motorola holds many patents that are essential for operating those standards, access to which is crucial for developers of smartphones, the Commission concluded that the transaction would not significantly alter the existing market situation.

The Commission also considered whether Google would be in a position to use Motorola's standard essential patents to obtain preferential treatment for its services such as internet searching and advertising, however, it again concluded that the transaction would not change the existing market situation.

The Commission's announcement stated that the clearance decision is without prejudice to its investigation of potentially anti-competitive uses of standard essential patents in this sector, notably its ongoing investigation of Samsung's patent litigation.

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