Google chairman says will not favor Motorola
(Reuters) - The executive chairman of Google Inc on Tuesday played down concerns the search giant would give preferential treatment to Motorola Mobility Holdings after its planned purchase of the handset maker is completed.
Context & Ripple Effects
Eric Schmidt is making his second public attempt in five weeks to defuse the central objection to Google's $12.5 billion purchase of Motorola Mobility: that owning a handset maker would corrupt Android's neutrality. In early October he insisted the deal wouldn't 'screw up' Android; on Tuesday he went further, denying outright that Google would give Motorola preferential treatment once the acquisition closes.
The reassurance tour reflects where the deal actually stands — announced in August but not yet closed, with China confirming it had received no approval request as of late August and other jurisdictions still reviewing. Samsung, HTC and other Android licensees are watching whether Google's word survives contact with a regulator-imposed remedy.
First-order effects
- Android device partners get a verbal neutrality pledge rather than a contractual one — their sourcing calculus now hinges on trusting Schmidt's denial over any enforceable commitment.
- Google keeps the deal's critical path open by addressing the antitrust concern directly while Chinese and other approvals remain outstanding.
Second-order effects
- Rival handset makers gain leverage to demand written fair-licensing and non-discrimination terms as a condition of staying in the Android ecosystem rather than defecting to alternatives.
- Regulators reviewing the merger can point to the chairman's own statements when weighing behavioral remedies, raising the bar for Google to close without conditions.
Third-order effects
- If platform owners can acquire hardware arms only under repeated public neutrality pledges, vertical integration in mobile becomes a regulated-privilege model — deals shaped less by price than by what conduct commitments the buyer will sign up to.
- The episode hardens a template for how search-and-OS gatekeepers must argue neutrality: assurances before close, then monitoring after, as the price of owning both the platform and a device on it.
The trend: Mobile platforms are absorbing hardware makers, with ecosystem-neutrality promises to licensees and regulators becoming the standard toll for crossing that line.