Google's plan to acquire Motorola Mobility for $12.5 billion promises to trigger antitrust red flags just as much as it will shake up the mobile-handset business.
As the dominant leader in Internet search and search advertising, Google can't make an acquisition without raising regulatory hackles. And this deal, based on its size alone, will spark trustbuster scrutiny.
"We're quite confident that this will be approved," Google's chief legal officer, David Drummond, said during a conference call announcing the news today. "We believe, very strongly, that this is a pro-competitive transaction."
Google is already facing an antitrust investigation from the Federal Trade Commission. In June, the company disclosed that it received "formal notification" from the agency that it was reviewing the company's business. And last week, The Wall Street Journal reported that the FTC was including the Android mobile operating system in that probe, looking into whether Google is barring smartphone makers that load Android on their devices from using competitors' services.
In looking at the Motorola deal, regulators will most certainly zoom in on Google's industry-leading Android. The question they'll try to answer is whether the Motorola acquisition benefits Android in a way that could increase Google's market power in search and search advertising.
It's an issue that Drummond sought to address right away.
"Android has clearly added competition, innovation, increased user choice," Drummond said on the call. "We think protecting that ecosystem is pro-competitive, almost by definition."
Competitors, though, are likely to see things differently. For now, Google's biggest rivals, Apple and Microsoft have declined to comment on the antitrust implications of the deal. But it's almost certain that they'll raise concerns with regulators.… Read more