Friday, June 29, 2012

Google/Motorola reportedly being investigated by the FTC for suspected FRAND abuse

This Bloomberg article cites three unnamed sources for the launch of a U.S. antitrust investigation of Google subsidiary Motorola Mobility's suspected abuse of standard-essential patents (SEPs). The Federal Trade Commission is apparently concerned about Google's pursuit of injunctive relief, such as ITC import bans, on the basis of FRAND-pledged SEPs. At this stage, Google, which completed the acquisition of Motorola Mobility in May, must accept responsibility for what's going on:

"Another focus of the FTC probe, the person said, is Google's decision to continue litigation started by Motorola Mobility over industry-standard patents after Google bought the company."

In my opinion, Google's seamless continuation of Motorola Mobility's FRAND abuse comes as little surprise in light of the statement Google sent to standard-setting organizations earlier this year in connection with the Motorola deal. It was a pretty clear indication of Google's intentions.

No matter how hard I try, I can't see a point in Google's decision to continue the pursuit of a litigation strategy that is not going to succeed, but adds to its antitrust worries. Google is already being investigated by the FTC and the European Commission over its conduct in the search business. In the United States, Google's leveraging of Android to cement its dominant market position in search has become a key antitrust concern. Now Google is separately being investigated by the same two competition authorities over its abuse of SEPs. The EU launched two formal investigations over that particular issue in April.

Google had this coming. Earlier this month, the FTC wrote to the ITC to discourage import bans over SEPs in two investigations that were instituted at Motorola's request. In its first footnote, the FTC statement clarified that it did "not address whether seeking an injunction or exclusion order for RAND-encumbered SEPs would violate Section 5 of the Federal Trade Commission Act, 15 U.S.C. § 45, or Sections 1 or 2 of the Sherman Act. 15 U.S.C. §§ 1-2", but I think the FTC's intervention in and of itself should have drawn Google's attention to the writing on the wall.

U.S. lawmakers are profoundly concerned. Yesterday I reported on a letter that six Republican senators, led by the Chairman of the Antitrust Subcommittee, sent to the ITC. Previously, Members of Congress from both sides of the aisle filed letters that I published a couple of weeks ago. In addition, a number of major industry players, most of whom have no involvement of any kind in the ongoing "smartphone patent wars", made submissions on the public interest.

With investigations on both sides of the Atlantic underway, the noose is tightening and Google should withdraw its abusive requests for import bans and injunctions in the U.S. and Germany. Google has every right to defend Android. It even owes this to the Android ecosystem. But it has to do so without violating competition laws.

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