Google-Motorola Deal Faces Further DoJ Scrunity
The US Justice Department has asked Google for more information relating to its bid to acquire Motorola
Google has received a second request for information from the US Justice Department (DoJ), as it seeks to investigate Google’s $12.5 billion (£8bn) purchase of Motorola Mobility.
Google made a bid to acquire Motorola in mid August, claiming the company’s 17,000-plus current and 7,500 pending patents would provide the company with protection against those who want to sue Google for patent infringement.
Google would also likely use the company’s set-top box business to boost its Google TV service.
Motorola makes several leading Android handsets, including many of Verizon Wireless’ signature Droid models. Even though Google vowed to let Motorola operate on its own, there have been questions as to whether Google is looking to wall off its open-source operating system from other OEMs.
As all large acquisition plays by Google do today, the Motorola bid caught the attention of the DoJ, which in April cleared the search provider’s $700 million acquisition of travel software maker ITA Software.
Google had hoped to close the deal by the end of the year, or by early 2012, but that timeline has certainly been thrown off track with the DoJ’s request for more info on the merger. This doesn’t mean the DoJ will block the deal, but it does mean it found enough antitrust concerns to merit a closer look.
“We believe very strongly this is a pro-competitive transaction that is good for Motorola Mobility, good for consumers and good for our partners,” said Denny Woodside, a senior vice president at Google.
“That said, we know that close scrutiny is part of the process and we’ve been talking to the US Department of Justice over the past few weeks. Today we received what is called a ‘second request,’ which means that the DoJ is asking for more information so that they can continue to review the deal. (This is pretty routine; we’ve gotten these kind of requests before.)”
Routine might be an overstatement. The company received second requests from the DoJ in the ITA deal, and received one in June from the DoJ over its $400 million (£255m) Admeld buy. Google also fielded second requests from the Federal Trade Commission over its deal to buy AdMob for $50 million (£32m) in 2010, and for its $3.1 billion (£2bn) DoubleClick deal in 2007.
However, as AllThingsDigital noted, only 4 percent of transactions received a second request last year from US antitrust agencies. It just so happens Google, owing to its size and dominant position online, gets more than the average company.
Still, the DoJ is likely to bless the Motorola bid because it’s a vertical merger concocted by two companies whose businesses are more symbiotic than directly competitive.
Getting Motorola is more important than ever for Google, allowing the search provider to protect the Android OEM that hasn’t capitulated to Microsoft in patent litigation. HTC and now Samsung agreed to pay Microsoft licensing fees for Android handsets they sell.