Google's Effort to Minimize Concerns on Motorola Mobility Bear Close Watch
Since Google controls more than 79% of all searches in the U.S. and more than 90% of all searches in Europe, any deal the company makes is rightly the focus of attention from antitrust enforcers. We’ve come to expect Google to downplay the impact any deal will have on competition and make promises to play fairly. Unfortunately, they often say one thing while the deal is under investigation and do another once the deal is approved.
While Google’s proposed acquisition of ITA Software was under review by the Justice Department, Google committed publicly to “building flight-search tools that will drive more traffic and potential customers to airlines’ and online travel agencies’ websites.” But after the Justice Department imposed strict conditions on the ITA Software deal, including ongoing monitoring of Google’s travel business, Google turned its back on its commitments to the public and antitrust enforcers by rolling out a Flight Search product that alongside flight search results provided links only to airlines and excluded all other online travel sites, many of which offer deals that aren’t available on airline websites.
Now, as reports indicate U.S. and European Commission antitrust enforcers are close to finishing their antitrust review of Google’s proposed acquisition of Motorola Mobility, it seems Google is at it again – making public commitments that essentially amount to ‘trust us’ all over again.
MG Seigler sets the stage:
“Leading up to the approval of the deal, Google had to make assurances that they would act fairly with the patents they were acquiring. Because Motorola has key patents on things like 3G and 4G technologies, this is vital for the industry.”
And AllThingsD’s John Paczkowski describes how in a recent letter Google indicated “it will honor Motorola Mobility’s existing essential patent licensing commitments and grant new ones going forward with ‘a maximum per-unit royalty of 2.25 percent.’ What does that mean for mobile device makers? As Paczkowski notes: “A rate of 2.25 percent on 2011 iPhone sales, for example, would have amounted to about $1 billion in potential royalties for Motorola. That doesn’t seem fair or reasonable.”
There’s no question that mobile is a key market for the future of the Internet – and the future of search. Remember, Google already controls 97 percent of mobile search, and Android is the leading selling mobile Operating System in the US. Now, Google is giving mobile device makers that compete with Motorola Mobility an ultimatum: pay us enormous royalties in advance for your projected sales, or else we might sue you. Sounds like a deal only a monopoly could make.
Luckily, the WSJ notes: “However, antitrust enforcers in the U.S. and Europe remain concerned about Google’s commitment to license Motorola patents to competitors on fair terms, those people said, and will closely monitor Google’s use of the patents.”
That’s good news for consumers, considering Google’s history of abusing its dominant position and failing to live up to its word. As we’ve said before, when it comes to Google, “trust us” is not enough.