14 Feb 2012

Google Acquisition of Motorola Bid Approved

The European Commission has cleared Google to move ahead with its $12.5bn acquisition of Motorola Mobility.

EU Competition Commissioner, Joaquin Almunia stated that the regulators did not think the deal would diminish competition.

In a further move, regulators in the US have also agreed with the takeover.

However both authorities have noted that they will need to monitor the company and rivals’ use of patents. In a statement by the EU Commission it said: “The commission will continue to keep a close eye on the behaviour of all market players in the sector, particularly the increasingly strategic use of patents.”

Google launched its bid in August 2011 after Motorola split into two, creating Motorola Mobility. The deal will give Google a platform for the manufacture of mobile phones along with access to all the patents held by Motorola. This will further strengthen the position Google has on the mobile communications market.

With Google seeing the Internet and search market place shifting progressively towards mobile devices rather than desktop computers, the acquisition of Motorola gives them a strategic foothold on which they can strengthen their position.

However regulators were concerned that the acquisition of Motorola would favour Motorola Mobility and make it more difficult for other larger Android manufacturers such as Samsung or HTC, to use its Android operating system. The Commission concluded that this was unlikely, especially in the EC, where Motorola is seen as a relatively minor player in the overall mobile marketplace.

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