The European Commission late Monday cleared Google's proposed $12.5 billion acquisition of Motorola Mobility but it also issued a simultaneous warning that the companies could be charged with antitrust violations for abusing the fair, reasonable and non-discriminatory (FRAND) terms of MMI's standard-essential 3G patents.
Google is buying MMI for its huge patent portfolio.
Antitrust czar Joaquín Almunia issued an unusual statement separate from the merger go-ahead saying, "Today's decision does not mean that the merger clearance blesses all actions by Motorola in the past or all future action by Google with regard to the use of these standard essential patents. Our decision today is without prejudice to the legality under EU antitrust law of Motorola's past and Google's future actions. However, the question whether Motorola's or Google's conduct is compliant with EU antitrust law cannot be dealt with in the context of the merger procedure."
Google last week sent standards bodies a letter indicating MMI would continue to demand 2.25% of the "net selling price of the relevant end product" even if the FRAND patents are implemented in only one of the device's hardware or software components. If they don't pay, users could face a lawsuit and an injunction.
The EC, which is already investigating Samsung for abusing its FRAND patents, said it approved the MMI acquisition "mainly because it would not significantly modify the market situation in respect of operating systems and patents" for smartphones and tablets.
According to Almunia, "We have approved the acquisition of Motorola Mobility by Google because, upon careful examination, this transaction does not itself raise competition issues. Of course, the Commission will continue to keep a close eye on the behavior of all market players in the sector, particularly the increasingly strategic use of patents."
The EC is of the opinion that Google won't restrict the use of Android to MMI, a minor player in Europe, as opposed to Android rivals and major players Samsung and HTC (who still might be worried about Google favoring MMI) because Google's using Android to drive the spread of its other services to the widest possible audience.
It also said it "examined whether Google would be in a position to use Motorola's standard essential patents to obtain preferential treatment for its services, including search and advertising" and "found that Google already had many ways in which to incentivize customers to take up its services and that the acquisition of Motorola would not materially change this."
The Justice Department is expected to wave the acquisition through this week too. It is also expected to approve the $4.5 billion of Nortel's patent portfolio by a consortium of companies including Apple and Microsoft. Their success at auction spurred Google to buy MMI and set the inflated price for patents.