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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.

by MacNN Staff



  1. LenE

    Joined: Dec 1969


    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

  1. Zanziboy

    Joined: Dec 1969


    Typical Google

    How Google could be threatened by this is beyond me. Google already controls internet advertising, the phone market, internet searching, internet maps, and soon the tablet market. Now, they control government regulators who will ensure their monopoly is complete. How ridiculous!

    I am sure Google will manipulate news links for some wealthy congressmen in the upcoming election as a thanks for their compliance.

  1. glideslope

    Joined: Dec 1969



    Enough of Washington. We need Civil Unrest.

    Comment buried. Show
  1. tonlon0015

    Joined: Dec 1969


    comment title


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    put this url in google sirch

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  1. charlituna

    Joined: Dec 1969



    They vetted Apple and gave them permission to bid. You can bet that that included some kind of clause that they have to license the tech to anyone and everyone at fair rates etc. They can't refuse any company (say Google). The same would have been done with Google before they were cleared to bid.

    If you look at the details post buy, it wasn't really a group that bought the patents. Apple did. partially funded by licensing agreements set up by the other folks on the condition that Apple won.

    And we haven't seen Apple refuse to license to Google so this claim that they might so the government should act is just ridiculous

    Comment buried. Show
  1. wrenchy

    Joined: Dec 1969


    The DOJ and FTC

    simply don't like Patent Trolls buying up large amounts of patents to stifle good healthy competition. Trolls like Apple and Microsoft should be heavily fined and their CEO's thrown in jail for such practice.


    - Sent from my Android Device.

  1. hayesk

    Joined: Dec 1969


    No wonder

    With everyone trying to sue everyone else over ridiculous patents, it's no wonder companies want to buy up patents. The DOJ really has to work with the Patent Office to come up with a better system where companies don't feel they need to buy up patents just to protect themselves.

  1. wrenchy

    Joined: Dec 1969


    re: No wonder

    Well said hayesk.

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