China Approves Google-Motorola Deal

By Beecher Tuttle May 21, 2012

Chinese regulators have signed off on Google's $12.5 billion acquisition of Motorola Mobility, but with one major stipulation: the Internet giant must keep its Android mobile operating system free and open to device makers for at least five years.

The move is a clear effort by China to benefit domestic handset vendors like as ZTE Corp. and Huawei Technologies Co., which rely on Android to power their own mobile devices. Google's leap into the hardware business has caused some apprehension among Android partners who now find themselves as de facto competitors of the search firm.

Google has agreed not to discriminate against device manufacturers and said it will offer each partner similar access and privileges to Motorola, according to the Wall Street Journal. However, China's Ministry of Commerce ruled that Google does retain the right to charge for auxiliary services that are not included in Android, such as cloud computing applications.

Even with the stipulation, the ruling represents a major victory for Google as it has now received approval from all jurisdictions. The U.S. Justice Department and the European Union signed off on the deal earlier in the year. Google told Bloomberg that it expects the transaction to close "imminently."

The deal accomplishes several goals for Google, which now finds itself with a strong foothold in the hardware business as well as a treasure chest of 17,000 patents and its 7,500 pending patent applications that can help the company protect against patent suits from competitors like Apple.

As a latecomer in the mobile space, Google – along with all manufacturers that rely on Android – has been a clear target for intellectual property litigation.

The EU granted unconditional regulatory approval of the deal back in February, but warned Google that it will closely monitor the situation to ensure that the company doesn't abuse the power that comes with the patent war chest. The EU approved the deal after finding that Google has no legitimate reason to close Android off to other mobile device manufacturers after acquiring its own hardware stake. "The Commission's investigation showed Android helps to drive the spread of Google's other services," the EU noted in a statement at the time. "Consequently, given that Google's core business model is to push its online and mobile services and software to the widest possible audience, it is unlikely that Google would restrict the use of Android solely to Motorola, a minor player."

After agreeing to China's one major condition, Google now has no choice but to keep Android open, at least for the next five years.


Edited by Brooke Neuman

TechZone360 Contributor

SHARE THIS ARTICLE
Related Articles

Verizon, Oh Verizon, Where Are You Going?

By: Doug Mohney    2/23/2017

Last June, Verizon closed a $4.4 billion deal to buy AOL. Executives said the acquisition would enable the company to layer AOL's advertising strength…

Read More

AMD: The Time For Ryzen Has Arrived

By: Rob Enderle    2/23/2017

The Ryzen part is a powerful alternative to Intel's offering, which will result in several new, more powerful, and affordable systems for those that g…

Read More

Voice 2017 - Best of Times, Worst of Times

By: Doug Mohney    2/21/2017

Voice is in a unique position these days, judging from the conversations I've had over the past six weeks during CES and ITEXPO. Available quality is …

Read More

Needed: Better Location Tech for RideShare Services

By: Doug Mohney    2/21/2017

Uber, Lyft, and other ride services have pushed the bounds of location tech to the point of frustration for end-users, both drivers and customers alik…

Read More

Human Carrying Drones May Arrive in 2017

By: Rob Enderle    2/21/2017

There are a couple really big problems that will likely make human carrying drones more of a tourist attraction than a real solution for some time, bu…

Read More