China Approves Google’s Motorola Mobility Acquisition with Condition that Android Remain Free

By | 21 May, 2012

After getting the approval from U.S and European regulators, followed by consent from Israel and Taiwan, China has given its approval of Google‘s US$12.5 billion acquisition of Motorola Mobility, which marked the completion of the worldwide serial regulatory review process. The deal will be inked in this coming week before Google I/O Developers Conference, a Googler says.

Family members of a Google worker pose with a huge Android statue and Google Android phone at Google headquarters in Mountain View, Calif., in this file photo. Google has obtained regulatory clearances from China for its acquisition of Motorola Mobility, with the condition that Android remain free and open source for at least five years. (AP Photo/Paul Sakuma)

China was the last hurdle in the chain of regulators to approve the deal. Earlier, the U.S. Justice Department found no evidence that the union with Mobility “would lessen competition in a mobile device market” despite the fact that more and more people connect to the Internet through smartphones and tablet computers, compared to using desktop and laptop computerss.

This strategic corporate action will allow the Android creator to have an in-house brand for its its smartphones and tablets. The deal will also bolster Google’s patent portfolio, with Motorola’s 17,000 patents and 6,800 pending patents.

Interestingly, leading media (AP, Reuters and WSJ) have reported that Google had to agree to keep Android free and open at least for five years, in order to get Chinese anti- trust and regulatory officials’ approval. China has also sought both firms’ commitment not to deny other handset manufacturers access to the open source OS or to give Motorola Mobility undue advantages.

The world’s biggest mobile phone market deserves to worry. Motorola’s biggest manufacturing business is in what is likewise the world’s most populous country. More than half the devices produced are feature phones, which are mostly sold in Asian markets. Meanwhile, Android has such a huge market share, as well, that if that is locked to a specific hardware — or even just updates to the software — consumers will be at risk of monopolistic behavior.

Given these considerations, government and regulatory agencies usually impose impose conditions that will prevent the likelihood of monopoly, especially if the issue involves a fast-growing technology like mobile devices.



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