Could Google’s Purchase of Motorola Mobility Make it Illegal in China?

Google’s out-of-nowhere purchase of Motorola Mobility for $12.5 billion made headlines across the tech world and led to speculation that, following in Apple’s footsteps, Google may be looking to make its own handsets for the Android platform.

But in China, the move is raising other concerns. In a recent interview with Xinhua, China’s state wire service, an official from China’s Department of Commerce said that they had noted Google’s purchase of Motorola Mobility and that the Department has not yet received an anti-monopoly application from Google.

Under Chinese law, companies whose total volume of business in the preceding financial year exceeded 10 billion RMB (or about $1.5 billion US) and whose subsidiaries did business that exceeded 400 million RMB (or about $62 million US) inside China must submit an application to the Department of Commerce or risk being labeled an illegal monopoly.

Motorola Mobility sold 2.2 million smartphones in China last year, and shipped an additional million in just the first quarter of 2011. Although the Department of Commerce reserves the right to determine how a company’s “total volume of business” is measured, it seems extremely likely that Google does qualify as a monopoly under Chinese law.

That doesn’t mean it’s illegal; however, the company will have to submit an application to the Department of Commerce, and they may want to get to that sooner rather than later. Google, as we all know, has a bit of a rocky relationship with the Chinese government, which it has accused of hacking and disabling its services on numerous occasions. The government, for its part, has blocked or disabled many of Google’s services within China, including their newest social effort, Google +, within days of its beta launch.

We’ll keep an eye on this situation and update whenever there’s new information to be had.