China Approves Google’s Motorola Buy

Chinese regulatory authorities have given their conditional approval to Google’s acquisition of Motorola Mobility, clearing the last hurdle for the deal, which is expected to close this week.

China’s Ministry of Commerce did place a condition on its assent, however – that Google’s Android mobile device operating system must remain freely available to manufacturers without “discrimination” for five years. The move appears to be intended to protect Chinese manufacturers of Android devices, such as ZTE and Huawei, as they compete with rivals based in Taiwan, South Korea and elsewhere.

Patent portfolio

The $12.5bn (£8bn) acquisition of Motorola Mobility is expected to give Google further leverage against Apple in the battle for smartphone dominance, in particular giving Google access to a large patent portfolio that can be deployed in fending off lawsuits from Apple and others.

While Google has relatively few patents, compared with established rivals such as Apple, the beginnings of Motorola’s patent portfolio date back to radio inventions from before the Second World War. Motorola Mobility split from Motorola’s business division in 2010.

The acquisition has raised concerns for some that once linked to a particular device maker, Google will effectively enter into direct competition with the handset makers who have licensed Android. The Chinese government appeared to have referred to this concern in stating that Google must not “discriminate” against device manufacturers.

In February Google wrote to standards organisations to reassure them that manufacturers would continue to be able to license Motorola’s patents on fair and reasonable terms if the acquisition was approved.

Competition ‘restricted’

While the ruling specifies that Android should remain freely available, it states that Google will continue to have the right to charge for add-on services such as cloud applications that are associated with Android.

China’s Ministry of Commerce noted in a statement that the deal does restrict competition, arguing that Android’s large market share and ecosystem of applications make device makers heavily reliant on Google.

Google said in a statement that its position on the deal has not changed. “We look forward to closing the deal,” Google stated.

Google previously obtained approvals from the US, the EU and Israel.

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