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December 12, 2011

Google, Motorola Mobility and Apple in Europe - Win Some, Lose Some
By Peter Bernstein
Senior Editor

It has been an interesting few days in Europe for Google and it pending acquisition of Motorola (News - Alert) Mobility. This being the holiday season, the Google/Motorola crew got:

  • A possible lump of coal in its Christmas stocking with notification by European Union regulators that they have suspended the antitrust review of plans by Google (News - Alert) to purchase Motorola Mobility Holdings and are requesting more information to review.
  • A possible expensive gift when the Mannheim Regional Court in Germany ruled Apple’s iPhone (News - Alert) and iPad and other mobile products violate a key wireless patent owned by Motorola.

To paraphrase a long-time hit song from the children’s TV show Sesame Street, it’s not easy being mean.

More info requested

First, the not-so-good news. It has come to light that European Union regulators suspended their antitrust review on December 6 and are requesting more information about the deal according to a filing on the regulator’s website. The antitrust authority will continue the review after it has obtained “certain documents that are essential to its evaluation of the transaction,” said Amelia Torres, a spokeswoman for the Brussels-based European Commission.

As reported by Bloomberg, an e-mail from Al Verney, a spokesman for Google in Brussels, cited the request as “routine” and went on to say, “We’re confident the commission will conclude that this acquisition is good for competition and we’ll be working closely and cooperatively with them as they continue their review.”

Bitter Apple

No stranger to brawls over intellectual property issues and trying to ban the sale of Android devices from companies such as HTC (News - Alert) and Samsung (being sued in 20 lawsuits in 10 countries) around the world, Apple got a taste of its own medicine. The German court ruled that the iPhone and iPad violate a critical GPRS (the predominant wireless standard in Europe) related to a “method for performing a countdown function during a mobile-originated transfer for a packet radio system.”

As noted in various accounts of the court action, the contested patent is available for licensing under fair, reasonable and non-discriminatory (FRAND) terms.  Apple has offered to license the patent on those terms going forward but retained the right to contest the validity of the patent in order to avoid paying damages on its use since 2007. In fact, as a hedge, Apple previously filed an action contesting the validity of the patent in Munich’s Federal Patent Court.

Where to next?

While it is problematic as to whether the EU action will derail the deal since this may be nothing more than a formality, it could push the acquisition date relatively far out into 2012 which, if nothing else, creates some market uncertainties. The patent issue on the other hand is likely to take several years to resolve at which point it could even involve rapidly aging technology given how fast the market is moving.

One observation can be made with more than a bit of certainty. As with the sovereign debt problems, Europe certainly has become a center of attention on all things mobile and the whole world is watching.

Peter Bernstein is a technology industry veteran, having worked in multiple capacities with several of the industry's biggest brands, including Avaya, Alcatel-Lucent, Telcordia, HP, Siemens, Nortel, France Telecom (News - Alert), and others, and having served on the Advisory Boards of 15 technology startups. To read more of Peter's work, please visit his columnist page.

Edited by Rich Steeves


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