Pakistan Observer

Google faces US antitrust probe over Motorola patents

Monday, July 02, 2012 - Bloomberg—Participants at the Google I/O conference in San Francisco on Thursday. The company is facing a probe on whether it intends to license technology under patents that help operate 3G wireless, Wi-Fi and video streaming on fair and reasonable terms.

San Francisco A US antitrust regulator has opened a formal probe into whether Google Inc’s Motorola Mobility unit is honouring pledges it made to license industry- standard technology for mobile and other devices on fair terms, three people familiar with the situation said.

The Federal Trade Commission has issued a civil investigative demand, which is similar to a subpoena, to the owner of the Android mobile operating system as it scrutinizes whether Google is improperly blocking rivals’ access to patents for key smartphone technology, one of the people said.

The agency is also seeking information from companies including Microsoft Corp. and Apple Inc as it investigates whether Google intends to license technology under patents that help operate 3G wireless, Wi-Fi and video streaming on fair and reasonable terms, another one of the people said. The people declined to be identified because they weren’t authorized to speak publicly about the matter.

Another focus of the FTC probe, the person said, is Google’s decision to continue litigation started by Motorola Mobility over industry-standard patents before Google bought the company. Those lawsuits could end up blocking imports of popular consumer products such as Microsoft’s Xbox and Apple’s iPhone and iPad.

Industry-standard technology helps ensure that different manufacturers’ products, such as mobile phone antennas and global-positioning system software, work together. Companies that create technology that helps develop the agreed-upon industry standard pledge to license patents for those inventions on reasonable terms.

“We take our commitments to license on fair, reasonable and non-discriminatory terms very seriously and are happy to answer any questions,” Niki Fenwick, a Google spokeswoman, said.

Patent litigation is escalating as handset and device makers vie for increasing shares of the worldwide mobile-device market, projected to reach $360 billion this year, according to estimates by Yankee Group, a Boston-based research firm. The global patent fights heated up in March 2010, when Apple filed its first complaint at the International Trade Commission against Android-phone maker HTC Corp.

“Antitrust agencies around the world are worried about this patent problem, which is particularly important as we shift to mobile technologies,” said Bert Foer, president of the American Antitrust Institute in Washington, which advocates strong enforcement of antitrust law. “An injunction against the use of a patent can destroy a company’s entire market strategy.”

FTC Chairman Jon Leibowitz said March 30 the agency was “looking at” the legality of companies seeking to prevent rivals from using patents that cover technology considered essential for an industry.

Dominic Carr, a spokesman for Redmond, Washington-based Microsoft, confirmed the company received a civil investigative demand from the FTC, declining to comment further. Steve Dowling, a spokesman for Apple, based in Cupertino, California, and Cecelia Prewett, an FTC spokeswoman, declined to comment on the investigation.

The FTC investigation follows the opening of formal probes of Motorola Mobility and Samsung Electronics Co. for the same issues by the European Commission earlier this year.

US antitrust regulators have agreed the FTC will focus on Motorola Mobility and the Justice Department will scrutinize Samsung Electronics Co.’s handling of industry-standard patent claims, said another person familiar with the matter. The person didn’t know if the Justice Department has issued information demands in connection with its review of Samsung.

The FTC is already conducting a broad antitrust investigation into whether Google’s search-results rankings and other business practices harm competition.—Agencies
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