Google Wins EU Approval for Motorola Buy

Google Inc (NASDAQ:GOOG) won unconditional EU regulatory approval on Monday for its planned $12.5 billion purchase of mobile handset maker Motorola Mobility.

But the European Commission said it would monitor the company and rivals' use of patents to ensure they comply with EU antitrust rules.

Web search leader Google wants to buy Motorola Mobility to boost its patent portfolio in a deal announced last August.

The EU executive, which acts as the competition regulator for the 27-member European Union, said the deal would not significantly change the market for operating systems and patents for these devices.

"We have approved the acquisition... because upon careful examination, this transaction does not itself raise competition issues," EU Competition Commissioner Joaquin Almunia said in a statement.

But Almunia said he was worried about the possibility of abuse of patents by Google and other firms now involved in a series of legal disputes over intellectual property rights.

"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," he told reporters.

"We might be obliged to open some cases in the future. This is not enough to block the merger but we will be vigilant," he said.

The U.S. Justice Department is expected to approve the acquisition this week, sources told Reuters last week.

The companies also need approval from Chinese regulators. They are expected to decide by March 20 whether to approve the deal or start a third phase of review, according to a source close to the situation.

Regulators in Israel and Taiwan also have not yet signed off on the deal.

Google announced in August that it would buy Motorola for its 17,000 patents and its 7,500 pending patent applications, as it looks to compete better with rivals such as Apple Inc and defend itself and manufacturers using its Android phone software in patent litigation cases.

The legal battles over patents between various technology and smartphone firms has prompted the European Commission to open an investigation into legal tactics used by Samsung Electronics against Apple and whether these breach EU antitrust rules.

A European Commission official said the regulator noted a pledge by Google last week to standard-setting agencies to license Motorola patents on fair and reasonable terms if the deal were to succeed, but that the promise was not a decisive element in its decision.

Microsoft Corp (NASDAQ:MSFT) has also promised not to seek injunctions to ban products based on standard-essential patents.