Inside Google

Regulators on both sides of the Atlantic have cleared Google’s $12.5 billion acquisition of Motorola Mobility, but are vowing to keep a close eye on the Internet giant’s behavior after the deal goes through.

What concerns both the European Commission and the U.S. Justice Department is how Google will use Motorola’s powerful mobile phone patent portfolio.

Motorola has 17,000 patents and 7,500 patent applications. Many observers think patents are what drove Google to make the purchase in the first place. Google’s rivals control a number of significant patents in the field.

“This merger decision should not and will not mean that we are not concerned by the possibility that, once Google is the owner of this portfolio, Google can abuse these patents, linking some patents with its Android devices. This is our worry,” EU Competition Commissioner Joaquin Almunia told reporters in Brussels, according to Reuters.”This is not enough to block the merger, but we will be vigilant.”

Justice also approved an Apple-Microsoft-RIM consortium’s purchase of patents owned by bankrupt Nortel Networks. During its review of the deals Justice concluded the transactions aren’t likely

to lessen competition. The investigation centered on whether so-called standard essential patents (SEPs) that Motorola and Nortel had promised to license to the industry would remain available.

Here is Justice’s conclusion:

“During the course of the division’s investigation, several of the principal competitors, including Google, Apple and Microsoft, made commitments concerning their SEP licensing policies. The division’s concerns about the potential anticompetitive use of SEPs was lessened by the clear commitments by Apple and Microsoft to license SEPs on fair, reasonable and non-discriminatory terms, as well as their commitments not to seek injunctions in disputes involving SEPs. Google’s commitments were more ambiguous and do not provide the same direct confirmation of its SEP licensing policies.

“In light of the importance of this industry to consumers and the complex issues raised by the intersection of the intellectual property rights and antitrust law at issue here, as well as uncertainty as to the exercise of the acquired rights, the division continues to monitor the use of SEPs in the wireless device industry, particularly in the smartphone and computer tablet markets. The division will not hesitate to take appropriate enforcement action to stop any anticompetitive use of SEP rights.”

At least the regulators are vowing to watch closely. Simply asserting that their motto is “Don’t Be Evil,” won’t cut it. Google’s behavior will matter and the regulators are watching.

And, there still are major antitrust investigations on both sides of the Atlantic into whether Google’s monopolistic dominance of search is violating antitrust law. We’ve long held that it does and that regulators should consider breaking the company up.