Will Google’s Motorola Deal Win Government Clearance?

Google‘s $12.5 billion acquisition of Motorola Mobility is certain to face regulatory scrutiny. But serious regulatory challenges? Experts seem to think that’s unlikely. This is a vertical acquisition (one company acquiring another in a different segment of the same industry), not a horizontal one (one company acquiring another in the same segment of the same industry) and therefore not likely to get the trustbuster treatment.

“There are no antitrust or regulatory concerns that would constitute deal breakers,” Stifel Nicolaus analyst Rebecca Arbogast said in a Monday research note. “It would seem unlikely the deal would be blocked in the absence of any significant horizontal market concentration issues. We also don’t see why the government would have a problem with Google arming itself in the smart-phone intellectual property wars by gaining access to the 17,000+ patents Motorola brings to the battle — a primary Google objective.”

But that doesn’t necessarily mean the transaction will make it through the review process without some regulatory concessions, especially once Apple, Microsoft and perhaps even an Android partner or two start raising concerns over the deal.

“Google said that it had talked with some of its top Android partners and that they were all enthusiastic about the Motorola Mobility deal,” Arbogast observes. “But we can’t rule out that some Android partners or others may have some concerns that would lead them to seek greater assurances and possibly government conditions, perhaps regarding nondiscriminatory treatment.”