Google's $1.1bn Waze acquisition draws FTC antitrust review

Google's $1.1bn Waze acquisition draws FTC antitrust review

Summary: The competition regulator in the US will begin digging into Google's planned takeover of Israeli mapping startup Waze.

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TOPICS: Mobility, Apps, Google, Legal
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Google has confirmed its $1.1bn acquisition of mapping company Waze is being reviewed by the US' antitrust regulator, the Federal Trade Commission.

Google confirmed lawyers from the FTC had contacted the company about the deal on Saturday, according to the Wall Street Journal.

Google may have sidestepped the usual process of notifying regulators prior to its announcement of the deal earlier this month by relying on an exemption. Filing is not required if the foreign company being acquired has sales of less than $70.9m, which the Israeli company with Silicon Valley headquarters is unlikely to have. However, the exemption test can include also the acquired company's assets, now worth over $1bn, according to Steven M. Davidoff, a professor of law at Ohio State University. (ZDNet has asked Google for confirmation, and will update the story if it receives one.)

Immediately after the deal was announced, Consumer Watchdog wrote to the Department of Justice claiming the acquisition of Waze would remove the most viable competitor to Google Maps in the mobile space.

According to the WSJ report, lawyers familiar with antitrust investigations believe it is unlikely the FTC would force Google to break up the deal since it would need evidence the merger would significantly harm competition in the mapping market.

However, the paper notes, the FTC may have asked Google to suspend plans to integrate Waze, pending its review.

Google has said the Waze would operate as a separate entity for now, with unspecified features from Google Maps and Waze drawn from each to improve the two service's capabilities.

Waze uses crowdsourced information to update traffic and navigation services in real-time through Android and iOS applications for around 45 million users. The free application is ad-supported, and used in 190 countries.

The FTC would need to investigate whether Waze would have become a direct competitor to Google's dominant Maps product or if Google acquired it to prevent it falling into the hands of rivals' such as Facebook, which was rumoured to have been interested in the company.

Notable rivals in the mapping space include Nokia, TomTom and OpenStreetMap. 

Topics: Mobility, Apps, Google, Legal

Liam Tung

About Liam Tung

Liam Tung is an Australian business technology journalist living a few too many Swedish miles north of Stockholm for his liking. He gained a bachelors degree in economics and arts (cultural studies) at Sydney's Macquarie University, but hacked (without Norse or malicious code for that matter) his way into a career as an enterprise tech, security and telecommunications journalist with ZDNet Australia. These days Liam is a full time freelance technology journalist who writes for several publications.

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4 comments
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  • This is stupid

    the primary reason behind antitrust law is to protect the consumer. A free app company being purchased by a company that offers its services for free should not fall under antitrust law. The purpose is not (Primarily) to protect the competition. Secondarily it protects the competition from mergers BECAUSE it could lead to raising prices for consumers if there isn't decent competition. BUT as i said, free app, free service, no problem for the consumer... no antitrust violation here folks.
    ukjb
  • Google collective says:

    Resistance is futile!
    super.happy
  • So.....

    Google buys Waze to kill any competition. Typical.
    Gisabun
    • Please tell us the competition....

      Where I live waze supplied the city map with about 3% of the available road. The rest is just empty. I've added about .1% but there is just so much work to do it's impossible since I'm the only one adding stuff. I look forward to having Google maps as a base and I can correct errors manually instead of waiting for 2 years for an official map update from my city.
      Kilroy238