Antitrust Investigation of Apple Led Nortel Patent Purchase

MacRumors · Jul 10, 2011

Despite authorizing some of the individual companies involved, antitrust regulators are said to be investigating the $4.5 billion consortium purchase of Nortel's patent portfolio last week. Per the WashingtonPost:

Federal antitrust enforcers are scrutinizing whether Google, often accused of abusing its Web search power, is facing an unfair coalition of companies that could block its popular Android mobile phone software, according to a source close to the matter.

The patent portfolio was won by a consortium including Apple, EMC, Ericsson, Microsoft, RIM and Sony. There has already been speculation that the acquisition is a big blow to Google's Android whose manufacturers may be subject to additional patent licensing fees. TechCrunch summarizes how the auction played out based on a Canadian court document that was released last week.

While much of the press after the auction focused on the Rockstar group's win, the court documents make it very clear that it was actually Apple that won in partnership with Rockstar. Apple was the only group that had not dropped out. Again, they staked the Rockstar group to ensure a victory for the stronger player. Why was Rockstar the stronger player? Because of the other companies involved. RIM, EMC, Ericsson, Sony, and yes, Microsoft.

The interest in the portfolio was significant due to the broad reach of the patents, especially in the area of wireless networking and LTE technology.

Article Link: Antitrust Investigation of Apple Led Nortel Patent Purchase

Aquaporin · Jul 10, 2011

The smartphone os market is pretty competitive. I do not see an issue here.

*LTD* · Jul 10, 2011

Google might have a pretty big pickle on their hands. The whole food-nomenclature thing with Android is very appropriate. Especially when patent-wise they seem to have laid an egg.

Those who have more patents market and litigate.

Those who have fewer patents market and worry.

bryanl · Jul 10, 2011

Azadre said:
The smartphone os market is pretty competitive. I do not see an issue here.

Ganging up with other companies to exclude another party is anti-competitive. Doesn't matter how we feel about it, if they truly are engaged in illicit activities.

*LTD* · Jul 10, 2011

bryanl said:
Ganging up with other companies to exclude another party is anti-competitive. Doesn't matter how we feel about it, if they truly are engaged in illicit activities.

Bidding pi and the distance to the sun is also pretty stupid.

Ryth · Jul 10, 2011

Maybe they should have saved up some cash instead of buying Youtube for billions.

It's their own stupidity for the spot they are in and their Android system blows anyway. It's fragmented and bloated and has no eco-system or direction.

black743 · Jul 10, 2011

So wasn't Google out to buy these patents for the same reasons? Would Google have been investigated as well? We all know that Google, had they won, would have held LTE hostage from all the other companies, as I understand this is one of the patents involved.

iDisk · Jul 10, 2011

Google has backed itself into a corner ... No one in the tech industry really cares about the companies other businesses besides search...

Only reason Android is popular, is because they give it away. You give anything away it's likely to have a big "adoption".

Google is just being a baby, and I hope they loose.

tekker · Jul 10, 2011

Ryth said:
Maybe they should have saved up some cash instead of buying Youtube for billions.

It's their own stupidity for the spot they are in and their Android system blows anyway. It's fragmented and bloated and has no eco-system or direction.

...and Android is still a huge success.

tekker · Jul 10, 2011

iDisk said:
Google is just being a baby, and I hope they loose.

What exactly are they losing? Google isn't suing.

iDisk · Jul 10, 2011

*LTD* said:
Google might have a pretty big pickle on their hands. The whole food-nomenclature thing with Android is very appropriate. Especially when patent-wise they seem to have laid an egg.

Those who have more patents market and litigate.

Those who have fewer patents market and worry.

You touched on a important topic... Google is patent dry in this market, and this is there only way to be competitive.

If the company showed loyalty towards Apple and the other tech companies in the area, they might have had a chance at some of these patents.

42streetsdown · Jul 10, 2011

bryanl said:
Ganging up with other companies to exclude another party is anti-competitive. Doesn't matter how we feel about it, if they truly are engaged in illicit activities.

I don't think anyone is going to get excluded. Just have to pay more licensing fees

Rodimus Prime · Jul 10, 2011

come on no matter who won they woul going to investigate. Also add in the list of company who banned together it does raise some red flags.
Chances are the result of it will come that require licensing out of the patents and not using them as weapons to hurt other companies.

iDisk · Jul 10, 2011

tekker said:
What exactly are they losing? Google isn't suing.

They influenced the antitrust regulators, to "investigate", it's so obvious, that Google is behind this.

brunnecc · Jul 10, 2011

Business

It's called business kids, otherwise it wouldn't be worth the $ to buy the patents in the 1st place...

-Chris
FOM

Ijustfarted · Jul 10, 2011

Lol at people getting emotionally involved with a platform. "i hope they lose!" So childish...

tekker · Jul 10, 2011

iDisk said:
They influenced the antitrust regulators, to "investigate", it's so obvious, that Google is behind this.

Can I get a source for that factoid, big guy? From everything I've read, Google didn't take the auction very seriously and really didn't want the patents that bad.

Worksafe · Jul 10, 2011

Microsoft vs Google

They should be investigating Microsoft for it's anticompetitive move before and during the auction since some of the patents that they were already paying for would have continued on regardless of who owned them and not been cancelled. What Microsoft wanted was to keep Google from touching the patents at all and I believe that Google let Microsoft play right into their plan since now it looks like it is anticompetitive.

MacNewsFix · Jul 10, 2011

What the what?!!!

Again, they staked the Rockstar group to ensure a victory for the stronger player. Why was Rockstar the stronger player? Because of the other companies involved. RIM, EMC, Ericsson, Sony, and yes, Microsoft.

Huh?

While I believe I get the general sentiment from that quote, it comes across more like gibberish than anything.

Addendum: Ok. I went to the original article, and now it makes sense. BTW, no disrespect meant to the author of the original post.

Also, you have to love MG Siegler's articles. His writing is pretty entertaining (loved the incorportation of Casino Royale) and well researched.

iDisk · Jul 10, 2011

tekker said:
Can I get a source for that factoid, big guy? From everything I've read, Google didn't take the auction very seriously and really didn't want the patents that bad.

Sorry it's just a personal opinion, but its kinda common to say "you didn't really want the patents" when you loose the bid...

I just hate what Google did to Apple, so i'm biased. (if thats not obvious

), but at least I'm honest about it

jayducharme · Jul 10, 2011

I don't see how this can be construed as anti-competitive. Google wasn't excluded from bidding; they dropped out. And Apple doesn't have sole control of the patents, even if they're a major stakeholder. The patents are spread out among a wide number of mobile companies ... it's just that Google isn't in the mix.

tekker · Jul 10, 2011

iDisk said:
Sorry it's just a personal opinion, but its kinda common to say "you didn't really want the patents" when you loose the bid...

I just hate what Google did to Apple, so i'm biased. (if thats not obvious ), but at least I'm honest about it

They bid pi and the distance to the sun... I think it's safe to say that they didn't want the patents that bad.

Pimp Lucious · Jul 10, 2011

tekker said:
Can I get a source for that factoid, big guy? From everything I've read, Google didn't take the auction very seriously and really didn't want the patents that bad.

Actually despite the odd bids, they did take it seriously, but went in with a maximum amount they were willing to spend. Once the bids exceeded 4 billion, Google was done. What does it matter if the the bids weren't perfectly rounded up to the million or billion when the winning bid was half a billion over their max.

It's a shame that innovation is giving way to buying up patents and extracting fees to kill off competition.

dashiel · Jul 10, 2011

black743 said:
So wasn't Google out to buy these patents for the same reasons? Would Google have been investigated as well? We all know that Google, had they won, would have held LTE hostage from all the other companies, as I understand this is one of the patents involved.

U.S. Anti-trust law is more likely to view a group acting in unison as a violation of antitrust laws than a single entity. Having said that the government would need to prove the consortium was intent on using the patent portfolio to harm others in the mobile phone industry. Thats an exceptionally tough case to prove lets face it the state of the government regulations on anti-competitive behavior has been crap for decades. Apple, Microsoft, et. al., can easily point to the litany of patent trolls suing them and claim the portfolio is just a shield and/or leverage in negotiating cross-licensing.

Pimp Lucious · Jul 10, 2011

iDisk said:
Sorry it's just a personal opinion, but its kinda common to say "you didn't really want the patents" when you loose the bid...

I just hate what Google did to Apple, so i'm biased. (if thats not obvious ), but at least I'm honest about it

What exactly did Google do to Apple?

Antitrust Investigation of Apple Led Nortel Patent Purchase

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