In the wake of separate complaints from Apple and Microsoft, regulators in the European Union (EU) have opened two antitrust probes of Motorola Mobility to determine whether the firm is engaging in unfair patent-licensing requirements and abusive litigation.
Motorola Mobility is in the midst of a $12.5 billion buyout by online search giant Google, a deal that was approved by the EU in February. However, at that time, EU regulators warned Google that this approval was conditional on patent complaints being resolved.
The US Department of Justice (DOJ) also approved the deal in February, and Google is now waiting on China's approval.
The Apple and Microsoft antitrust complaints are similar. Both allege that Motorola Mobility is wielding its so-called "standard-essential" patents as weapons against the firms by requiring egregious licensing terms. Standards-essential patents are patents related to technologies that are central to the market in question. In this case—the mobile and video markets—those patents involve central technologies such as 3G wireless connectivity, H.264 video playback, and the like.
Apple and Microsoft also complain that Motorola has attempted to stop them from selling key products in certain EU markets by filing injunctions against them. Microsoft last week filed a restraining order and offered a $300 million damages liability bond in a bid to stave off a Motorola injunction request related to key products such as Windows and the Xbox 360. The firm is also seeking to prevent Apple from selling its key products, like the iPhone and iPad.
"The holders of standard-essential patents have considerable market power," EU Competition Commissioner Joaquin Almunia said late last week. "This market power can be used to harm competition, and I am determined to use antitrust enforcement to prevent such hold-up by patent holders."
Now, the EU will determine whether Motorola is licensing its standard-essential patents legally, and under "fair, reasonable, and non-discriminatory" (FRAND) terms, as required by EU law. It will also examine whether Motorola's injunction attempts are an abuse of market power.
As you might recall from the EU's antitrust action against firms such as Microsoft and Intel, if Motorola is found guilty of either charge, enforcement can take many forms, including fines of up to 10 percent of the guilty firm's annual global revenues.
Google says that it and Motorola Mobility will work to resolve the charges.
"We haven't finalized our acquisition of Motorola Mobility but will work with the European Commission to answer any questions they might have," a Google spokesperson said in response to the two new probes. "We have longstanding concerns about patent abuses, including lawsuits and royalty demands targeting the Android ecosystem."