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EC Pitches Google an Ultimatum

EC Pitches Google an Ultimatum

Today in international tech news: The European Commission warns Google that it may have breached antitrust laws and offers the company a chance to settle without formal charges. In other Google news, China regulators approve the company's $12.5 billion purchase of Motorola Mobility, the finishing touch on Google's biggest-ever acquisition.

By David Vranicar
05/21/12 9:06 AM PT

The European Commission, the executive branch of the European Union, on Monday warned Google that the company may have abused its search engine dominance, according to The New York Times.

But it wasn't all threats from the EC: It also offered Google a chance to settle an antitrust investigation without facing charges.

From The Times:

Before sending a letter formally outlining the offer on Monday, [European Competition Commissioner Joaquin] Almunia told Eric Schmidt, the executive chairman of Google, by telephone last week that the company should respond "in a matter of weeks" to avoid the charges, which are known as a Statement of Objections.

Antitrust fines in Europe can reach up to 10 percent of a company's annual global revenue. Google's revenue was nearly (US)$38 billion last year.

Mr. Almunia said he was making the overture partly because Google had repeatedly asked for the chance to avoid an adversarial procedure. In the cases of other large U.S. technology companies, such proceedings lasted a decade.

The EC claims, among other things, that Google copied material from competitors' websites and that Google's agreements with advertising partners resulted in "de facto exclusivity."

Google Seals the Deal on Motorola

Regulators in China have approved Google's $12.5 billion purchase of Motorola Mobility, according to the BBC.

As part of the acquisition, which is Google's biggest ever, authorities in China will require Google to keep its Android software free for other device-makers for up to five years.

The acquisition had already been approved by U.S. and European regulators; China was the last big hurdle.

From BBC:

Google's purchase of Motorola Mobility allows it to move into the manufacturing of phones and tablet computers for the first time.

It also gives Google access to more than 17,000 of the company's valuable patents, which will help it defend itself and Android phone manufacturers in patent disputes.

European regulators, who signed off on the deal earlier this year, took longer than expected because of fears that Google would favor Motorola Mobility over other competitors like Samsung or HTC, which also use Android.

Yahoo Sells Stake in Alibaba

In a move that will net about $7 billion, Yahoo on Sunday agreed to sell half of its 40 percent stake in Chinese e-commerce group Alibaba, according to the Associated Press.

Alibaba will buy back $6.3 billion in cash and an estimated $800 million in preference shares, according to AP.

From the article:

The announcement caps at least a year of on-and-off talks as Yahoo has tried to sell its stake. Money from the sale might help Yahoo appease shareholders by giving it the ability to pay dividends, make acquisitions or buy back its own shares.

The companies also have an agreement for Yahoo to sell the remainder of its Alibaba stake in stages later.

Yahoo's interim chief executive, Ross Levinsohn, said in a statement that the agreement provided "clarity" for Yahoo shareholders.

Citing an unnamed source, the AP reported that the deal includes incentives that encourage Alibaba to hold an IPO by the end of 2015.

Twitter Briefly Blocked in Pakistan

Hours after blocking Twitter for messages that were "offensive to the Muslim community," Pakistani authorities have again granted access to the site, according to CNN.

The site was first blocked Sunday morning but was restored by Sunday evening.

From the CNN article:

A spokesperson for Pakistan's Ministry of Information Technology told CNN that Twitter was blocked because the site did not remove links and references to a competition taking place on Facebook to post images of the Muslim prophet Mohammed.

"The government is in contact with Twitter and had asked them to remove the material. When they didn't, it was decided that the site would be blocked," said ministry spokesman Naveed Ahmed.

Pakistan also blocked Facebook -- and about 1,000 other websites -- in 2010 for a similar contest. Facebook in 2010 heeded requests to remove the offending material back then, but a Pakistani official could not confirm whether or not Twitter had done the same.


Tech Trek is a blog that looks at tech news from around the world. David Vranicar is a freelance journalist currently living in the Netherlands. His ECT News Network archive, with links to articles and podcasts, is available here. You can email him at david.vranicar@newsroom.ectnews.com



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