Federal Trade Commission to investigate possible anti-trust issues in Internet search giant’s $1 billion acquisition of Israeli social mapping service Waze, which may drive Google to re-sell Israeli company
By Sagi Cohen
The Federal Trade Commission has launched an investigation into Google’s $1 billion acquisition of Israeli company Waze, the New York Post reported over the weekend. The FTC will look into possible anti-trust issues in the deal.
According to the report, although the agreement was finalized on June 11, Google believed it did not need to submit the deal for review because Waze’s US revenue is less than $70 million.
The Internet search giant confirmed that the FTC was reviewing the acquisition, but failed to provide any details on the investigation.
If the FTC concludes that Google must divest itself of Waze, the NY Post said, Google most likely would have to take the potential loss in re-selling the company. Yet the chances for such a development seem low: Because of Google’s strength in the market, regulators tend to thoroughly review and probe each of its deals and moves – but deals have rarely been canceled.
In January, for example, Google’s acquisition of Motorola for $12 billion was approved after a long FTC investigation process. American experts estimated last week that the extent of the deal would force US regulators to intervene and review it.
The New York Times quoted experts as saying that even if Google could show that this deal did not decrease competition, the acquisition could be unwound if Waze was found to meet Justice Department guidelines as a “firm that plays a disruptive role in the market to the benefit of customers.” According to those experts, Waze may well be such a firm, as there is no company with a similar product.
The main concerns expressed by sources in the US over the Google-Waze deal have to do with the search giant’s growing strength in the mapping and navigation field. Last week, an American consumer group demanded that US antitrust agencies block the Google-Waze deal, saying it would harm competition.
“Approval of the Waze deal can only allow Google to remove any meaningful competition from the market. It will hurt consumers and hinder technological innovation,” the Consumer Watchdog organization said.
According to Consumer Watchdog’s Privacy Project Director John Simpson, “Google already dominates the online mapping business with Google Maps. The Internet giant was able to muscle its way to dominance by unfairly favoring its own service ahead of such competitors as MapQuest in its online search results.”
He added that the acquisition would also “allow Google access to even more data about online activity in a way that will increase its dominant position on the Internet.”
View original Ynet publication at: http://www.ynetnews.com/articles/0,7340,L-4395800,00.html