U.S. Approves Google-Motorola Deal, But Warns Against Patent Abuse

The U.S. Department of Justice sanctioned Google's buyout of Motorola Mobility, after the European Commission's decision to do the same.

Both regulatory bodies granted the acquisition with the same condition that they intend to watch Google and Motorola for patent abuse, and will not abide an onslaught of litigation as a result of the deal, which grants Google access to Motorola's hefty patent portfolio.

The Department of Justice requires Google license its Motorola patents under fair and reasonable use standards, or FRAND. Google previously assured the European Commission it intends to honor FRAND, which helped the company gain needed approval. Regulators are making it clear with its warning that it will hold Google to its promise.

Compared to its rivals, Google lacked a strong patent collection before this deal. Google assisted HTC, Samsung and another Android partners in proxy battles against Apple, since the search giant lacked enough ammunition to enter into direct conflict with its biggest adversary.

The Motorola buyout, however, equips Google with valuable standards essential patents, or SEP, potent enough to directly fight Apple. Some analysts believed the Motorola patents would help Google launch an attack of its own against rivals, but the regulator provisions dampen the chances that Google engages in any overt or aggressive legal moves against its business opponent.

"The division continues to monitor the use of SEPs in the wireless device industry, particularly in the smartphone and computer tablet markets", said the Department of Justice, outlining its conditions after approving the deal. "The division will not hesitate to take appropriate enforcement action to stop any anticompetitive use of SEP rights".

The Department of Justice also said it will focus on enforcing antitrust laws to prevent larger companies from dominating the market, therefore hurting consumer choice. This regulatory vigilance comes at a time when the big companies are, indeed, looking to consolidate power and patents as market battles find their way into the courtrooms.

Android phone makers and Apple often clash in court as the Android OS comes under attack for patent infringement, but the smartphone giants also join forces to squash the competition, using their hefty patent arsenals.

Google's deal with Motorola gives the company extra ammunition in court cases like this, which damages chances for smaller companies and start-ups to overcome patent charges. Even under the watchful eyes of regulators, Google's new patent power has the potential to stifle competitors, especially if it uses them to come to the aid of its Android phone makers in court.

Google purchased Motorola to stay competitive as the smartphone industry continues its intellectual property skirmishes. Google could use its newly acquired patents to its advantage, despite regulatory scrutiny. The company will have to tread lightly as it attempts to make the most of the patents it purchased, or government inquiries are likely to continue.