Feds looking into antitrust issues with Nortel patent sale
updated 01:45 am EDT, Sun July 10, 2011
DOJ, FTC may look into joint bid on Nortel patents
An inside source revealed this weekend that US federal antitrust officials were looking into possible anticompetitive practices from Nortel's patent selloff. The Department of Justice, Federal Trade Commission, or both are being asked to see if the "Rockstar" coalition formed by Apple, Microsoft, RIM, and others may have been unfairly trying to stifle Android. The Washington Post's associate didn't know who had prompted the investigation, although the American Antitrust Institute had called on one this week.
Concerns exist that the alliance, which spent $4.5 billion to win the bid, might use the collective ownership of about 6,000 patents to sue Google beyond what some of the individual coalition members had already done. While it's possible the group is just interested in defending against pure patent trolls, the breadth of patents for 4G, Wi-Fi, social networking, and other components would make Android smartphones relatively easy targets.
Whether or not Google considered that a problem Google had bid $900 million as a "stalking horse" to force a high minimum bid and discourage all but the most determined bids. It didn't appear to have anticipated teamwork, however. Whether or not it saw this as an competitive measure to take seriously is still debated: Google was willing to raise its bidding much higher but oddly chose variants on math constants, like Pi.
With the exception of Sony, which actively uses Android, the core of the patent buying team has stood to lose from the rapid rise of Android, even if the iPhone is continuing to grow. Apple has been denied the lead it was likely to have in the US, while Microsoft and RIM are losing share even with partial or total reboots of their platforms. Apple has mostly pursued just a few key Android rivals, but Microsoft has attempting to shake down every Android device designer, albeit cutting deals for those that also use Windows Phone. RIM has been mostly quiet.
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iPhone, industry, Microsoft, Google, Android, BlackBerry, RIM, FTC, mobile phones, Department of Justice, Apple, Windows Phone, DOJ
Fresh-Faced Recruit
Joined: May 2004
Here we go again...
Mr. Schmidt has gone to Washington, again and again. He's spread some money and curried favor within the administration. Now, the administration's executive branch ogres (the FTC and DOJ) are going after those who bought the patents fair and square. Notice, the DOJ was "worried" about Apple's interest before the auction, but not concerned about Google, even as the DOJ and FTC have ongoing investigations into Google for antitrust issues.
Why would the "Rockstar" ownership of the patents stifle Android? Google and the implementors of Android systems could pay a royalty fee to license the appropriate patents. They already do this with Microsoft, Nokia, and other owners of relevant patents for the various phone and computing hardware.
This isn't an antitrust issue, as the companies buying the patents don't control even 50% of the market of smart phones, let alone mobile phones that will use the LTE standard. If Nortel had a monopoly on LTE technology, then they probably wouldn't have gone bankrupt.
-- Len