Regulator Angst Could Hit Google Hard
It appears that regulators, even a quarter of the way around the world, are fed up with all the lawsuits between big tech companies. The European Union’s Competition Commission has just lashed back at Google’s (NASDAQ:GOOG) Motorola Mobility unit over its actions toward Apple (NASDAQ:AAPL).
The battles have been taking place all over the world and in ever corner of it. Whether smartphone companies are battling in the market to have the best product and win market share or in the court room fighting to get money for patent infringements and win injunctions against competing devices, companies have been at one another’s throats for a while. Customers might enjoy the struggle between manufacturers, as they can root for their favorite, but it seems those involved in the court cases are wearying of it all.
U.S District Judge Robert Scola had been overseeing a case between Apple and Google over 12 patents and the meanings of more than 100 terms. In April, he complained that companies “have no interest in efficiently and expeditiously resolving this dispute,” adding that they are using “litigation worldwide as a business strategy that appears to have no end.” Furthering this sentiment, a Wisconsin judge threw out breach-of-contract claims last year from Apple against Google’s Motorola Mobility.
Recently, Google has been using its Motorola Mobility patents to challenge rivals in court, specifically Apple. After Google purchased the unit in 2012 for $12.4 billion, it had a strong patent portfolio that included some industry-standard patents that it quickly leveraged against Apple.
In the U.S., Google was forced to drop injunctions it had filed for in order to end an investigation, but that did not carry over to the EU, though that could soon change. According to the European Commission, injunctions are a tool for fighting against patent infringement, but they violate EU antitrust rules in the case if the targeted company is a willing to negotiate a license on fair terms.
A formal complaint — known as a statement of objections — was raised against Motorola Mobility, and could lead to a major fine if the company is found guilty of breaking antitrust rules. So, this case appears to be a matter of whether Apple was willing to negotiate a license for the patents.
A spokeswoman for Motorola Mobility said, “we agree with the European Commission that injunctions should only be sought against unwilling licensees and, in this case, Motorola Mobility followed the procedure established in the German Supreme Court’s Orange Book ruling,” adding that “Apple had to make six offers before the court recognized them as a willing licensee.”
Regardless of what the spokeswoman said, regulators seem to be getting annoyed. Last year, Joaquin Almunia, the head of the European Commission’s Competition Commission, sent a complaint to Samsung (SSNLF.PK) over its use of patents to against competitors. In relation to this current issue with Motorola Mobility, Almunia said, “I think that companies should spend their time innovating and competing on the merits of the products they offer — not misusing their intellectual property rights to hold up competitors tot he detriment of innovation and consumer choice.” This clearly expresses the sentiment against what has been commonly happening in courts around the world, and it was suggested that the EU regulators could charge more firms with anti-competitive practices in the future for similar activity. For Google in this case and companies in future cases, the cost could be as much as 10 percent of annual revenue.
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