FTC News

Lawyers largely dismissed the risk that regulators would try to block the search company’s first foray into hardware. However, the acquisition touches on a number of issues already under review in wider investigations of Google in Washington and Brussels, and could present a way for regulators to extract concessions from the company in return for clearing the deal, they added.

European regulators have already raised questions about Google’s use of its Android operating system, and are likely to look closely at the risk of the company “potentially leveraging its dominance in search into mobile search and advertising more generally” through the Motorola acquisition, said Thomas Vinje, an antitrust expert at Clifford Chance in Brussels.

The US Federal Trade Commission has also made Android a centrepiece of its own study of Google and is likely to look closely at a “downstream” acquisition that could see the company strengthen its search dominance, said Ted Henneberry, an antitrust lawyer in Washington.

Mr Henneberry also warned that Brussels was likely to take a close look at technology interoperability to make sure that Android would remain an open operating system available to other handset makers. That reflected the closer attention such issues have had in Europe, he added.

Motorola’s small market share in handsets is likely to mean that regulators will have little reason to try to block the deal, experts said. However, a further potential concern, according to one lawyer who refused to be named, is whether Google will be able to use the broad portfolio of patents it acquires with Motorola to force other Android handset makers into dropping rival operating systems, or influence them to favour Google’s services.

The growing regulatory concern about Google, as shown in the response to its most recent deals, made it likely that the company would have to make concessions in order to win approval, said Mr Henneberry. A similar review last year, into the acquisition of travel software company ITA, resulted in conditions that were designed to ensure ITA’s technology would continue to be available to rivals.

Meanwhile, privacy advocates are also expressing concern that Google’s control of Motorola Mobility’s set-top box business, which makes receivers for cable TV operators, could lead to it collecting data about the viewing habits of millions of consumers.

Analysts and television industry executives say it is likely that Google will begin integrating its software into the television experience, and could use the data it gleans to personalise television ads.

Google has already tried its hand at providing more targeted TV ads. In 2007, it began a trial with EchoStar Communications to sell ads for the Dish satellite television service.

“Cable companies, although they are regulated, are already doing a lot themselves with personalising ads,” said Pam Dixon of the World Privacy Forum. “With Google’s expertise, I would think the company would do quite a bit more with the data, and in a more sophisticated way.”

This prospect has some privacy advocates concerned that Google is gaining access to too much personal information

“Access to set-top boxes would be yet another troublesome way for the internet giant to intrude on our privacy and monetise information about us,” said John Simpson of Consumer Watchdog, an advocacy group. “Combining data gathered from all its sources would give Google an extremely accurate picture of your desires, hopes and fears without you ever knowing what’s going on.”