It would appear that Google is close to getting approval for one of the final parts of its takeover of Motorola, according to a recent report from the , the deal is close to receiving approval from the US Justice Department.
The report says that Google could receive the approval needed as early as next week, which would be one of the final parts needed for the $12.5 billion deal to go ahead.
Google has come under scrutiny recently from regulators in the US and Europe, on whether they will license various Motorola patents on fair terms, although Google recently announced that this is their intention.
Regulatory Scrutiny and Patent Licensing
The scrutiny from regulators primarily revolves around the concern that Google might use Motorola’s extensive patent portfolio to gain an unfair advantage in the market. Motorola holds numerous patents that are essential for mobile technology, and there is a fear that Google could potentially restrict access to these patents or charge exorbitant fees for their use. To alleviate these concerns, Google has publicly stated that it intends to license Motorola’s patents on fair, reasonable, and non-discriminatory (FRAND) terms. This commitment is crucial for maintaining a competitive market and ensuring that other companies can continue to innovate without facing prohibitive costs.
Ongoing Legal Battles
There are a couple of court cases ongoing at the moment between Motorola and Apple and Motorola and Microsoft, where Google are attempting to claim royalties from both companies on certain patents, although both Apple and Microsoft are claiming that these patents should be licensed under fair terms.
In the case against Apple, Motorola is seeking 2.5% of Apple’s sales for the use of its patents. This has led to a significant legal battle, with Apple arguing that the patents in question should be licensed under FRAND terms. Similarly, Motorola has also targeted Microsoft, claiming that the Xbox 360 and Windows 7 infringe on its patents. Microsoft, like Apple, contends that these patents should be available under fair licensing terms.
These legal disputes highlight the broader issue of patent wars in the technology industry. Companies often acquire patents not just for their technological value but also as strategic assets in litigation. The outcome of these cases could set important precedents for how patents are licensed and litigated in the future.
Impact on the Google-Motorola Deal
It isn’t clear as yet on whether these two ongoing cases will have any bearing on the takeover of Motorola by Google. However, the resolution of these disputes could influence the regulatory approval process. If Google is seen as using Motorola’s patents to stifle competition, it could face additional hurdles in securing approval for the acquisition.
Moreover, the acquisition of Motorola by Google is not just about patents. It also represents a significant move by Google to enter the hardware market more directly. Motorola’s expertise in hardware could complement Google’s software capabilities, potentially leading to more integrated and innovative products. This could be particularly important in the highly competitive smartphone market, where seamless integration of hardware and software is a key differentiator.
In conclusion, while Google is close to securing approval for its $12.5 billion acquisition of Motorola, several challenges remain. The scrutiny from regulators and ongoing legal battles with Apple and Microsoft underscore the complexities of the deal. However, if Google can navigate these challenges successfully, the acquisition could position it strongly in the technology market, both in terms of patents and hardware capabilities.
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