Why Is Google’s Waze Purchase Under Review?
Google (NASDAQ:GOOG) confirmed that it has been given notification by the Federal Trade Commission that their acquisition of Waze, the Israeli-based mobile navigation company, is currently under review.
A spokeswoman for Google declined to comment on the review, and an FTC representative didn’t immediately respond to requests for comment, according to The Wall Street Journal.
According to ZDNet, Google isn’t required by law to notify government regulators of an acquisition if the company’s revenue doesn’t exceed $70.9 million annually, which Waze isn’t thought to do. As Waze’s chief executive, Noam Bardin says about revenue, “This is Silicon Valley. We don’t talk about those things here.”
Although the revenue was too small to trigger an automatic review, the FTC can choose to examine a deal after it closes if the acquired company’s assets are valued over the $70.9 million. Google bought Waze for $1.1 billion.
ZDNet reports that Consumer Watchdog wrote to the United States Department of Justice shortly after Google outbid Facebook (NASDAQ:FB) and Apple (NASDAQ:AAPL) for Waze, claiming the Internet giant was taking out its biggest competitor to Google Maps.
Lawyers familiar with antitrust regulations say there is no need for Google to worry about potentially being forced to unwind the deal. In order for that to happen, the FTC would have to find evidence that the acquisition would significantly harm competition in the mapping market.
Facebook, which currently uses Microsoft’s (NASDAQ:MSFT) Bing Maps, and Apple, which currently uses part of Waze in its Apple Maps service, were outbid for Waze in June. Facebook reportedly offered $1 billion for the mapping company, which only has 110 employees. Now they must wait and see if another bidding war will commence, courtesy of the FTC.
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