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EU approves Google’s bid to buy Motorola


This news story was published on February 14, 2012.
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By Benjamin Pimentel, MarketWatch –

SAN FRANCISCO — The European Union on Monday approved Google Inc.’s bid to buy Motorola Mobility, in a major boost to the Internet giant’s effort to strengthen its position in the mobile market.

The European Commission, the European Union’s executive arm, said the body approved the proposed merger “mainly because it would not significantly modify the market situation in respect of operating systems and patents for these devices.”

The EC said it had considered “whether Google would be likely to prevent Motorola’s competitors from using Google’s Android operating system.”

But the body’s investigation “showed Android helps to drive the spread of Google’s other services.”

“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 in the European Economic area, as compared to operators such as Samsung and HTC,” the EC said.

Google’s Deputy General Counsel Don Harrison called the move “an important milestone in the approval process and it moves us closer to closing the deal.”

“We are now just waiting for decisions from a few other jurisdictions before we can close this transaction,” Harrison said in a company blog post.

Google’s bid to buy Motorola Mobility, which was announced last year, is seen mainly as the Internet company’s attempt to expand its intellectual property portfolio in the face of intensifying patent battles in the mobile computing market.

Apple Inc. recently sued Samsung Electronics Co., accusing it of infringing the tech giant’s patents. Apple has been challenging Samsung and other smartphone makers using Google’s Android operating system, which compete with the iPhone.

BGC Partners analyst Colin Gillis said the competition in the mobile space will likely heat up once the proposed merger closes.

“Once Google-Motorola closes, the hardware wars are going to be kicked up a notch with the hardware sold at a loss to draw users into services,” he said in an email.

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