Google Inc - proposed acquisition of Motorola Mobility Holdings Inc

Summary

Google Inc proposed to acquire Motorola Mobility Holdings Inc.

The ACCC liaised closely with overseas regulators throughout its review.

Market definition

The ACCC considered the proposed acquisition in the context of the following markets:

- supply of Mobile Device operating systems
- supply of Mobile Devices
- supply of internet advertising
- supply of payment systems on Mobile Devices.

The industry players and competitive dynamics in the technology markets identified above are largely global, but the competition assessment was limited to effects on Australian consumers.

Competition analysis

The proposed acquisition represents vertical integration by Google, which supplies a Mobile Device operating system, into supply of Mobile Devices.

The proposed acquisition also represents a conglomerate merger insofar as Motorola's ownership of telecommunications standard essential patents for Mobile Devices may complement Google's supply of an internet search tool and internet advertising services for Mobile Devices.

The ACCC considered that the proposed acquisition would be unlikely to substantially lessen competition in any market for the following reasons:

- Google's strong incentive to maintain supply of Android to third party original equipment manufacturers;
- rival original equipment manufacturers' ownership of key portfolios of standard essential patents;
- the ability of rival suppliers of Mobile Device operating systems to integrate into supply of Mobile Devices and vice versa;
- Motorola's relatively small market share and strong competition for supply of Mobile Devices from established global players; and
- the innovative and dynamic nature of these technology markets.

The ACCC in its assessment also noted the public statements made by Google and other key market participants in which they clarify their respective approaches to the fair, reasonable and non-discriminatory use of their standard essential patents by competitors.