Less than a month after Google acquired Waze, a social mapping startup company, there are reports that the Federal Trade Commission intends to carry out an antitrust review of the deal. According to New York Post, FTC Lawyers contacted Google expressing their intention to conduct the antitrust review of the acquisition. The New York Post cites sources that it says ‘are very close to the situation’ but Google has declined to comment on the reports.
Wall Street Journal reports that it talked to lawyers who are familiar with the government’s antitrust investigations and apparently, FTC may have asked Google not to initiate or proceed with any integration with Waze, pending the review and investigation. Wall Street Journal also says that because Waze’s revenue was ‘too low for FTC to automatically review it’, this is not a reason for the government body not to step in after the deal was closed to scrutinize the details of the deal, just like it intends to do.
Google beat a number of potential Waze suitors including Apple, Facebook and Microsoft to acquire Waze early this month for an undisclosed amount of between $1 billion and $1.3 billion., putting to rest speculations and rumors of acquisition of the company. Shortly after the deal was closed, Google announced that it intended to incorporate Waze’s croudsourced traffic data into its popular Google Maps product to improve traffic prediction feature. The Mountain View company also said that it intends to incorporate some of its own mapping technology into Waze and keep it running as an independent product from Google Maps.
At the moment, the reasons for FTC’s involvement, especially after the deal was sealed, is still unclear but there are chances that one of the companies that was eyeing Waze may have felt shortchanged and filed a complaint with FTC. Wall Street Journal also points at Google’s acquisition of Waze, it already having a dominant mapping service used globally by billions of users every day, as what may have attracted FTC’s attention considering that Waze has 45 million app downloads at the time it was acquired. Simply put, Google may not have really needed Waze and its move to acquire it may be viewed as a way to remove a potential competitor in the market.
Wall Street Journal reports that FTC may intend to determine whether Waze had the potential to take on Google Maps in the provision of mapping services and to find out if there is evidence that Google only acquired Waze to prevent potential competitors – Apple, Microsoft or Facebook – from buying the small company which could have stacked the odds against its Google Maps software.
Despite the impending antitrust investigation, Wall Street Journal says it is unlikely that FTC will demand that Google reverses the Waze acquisition deals since it must have undisputable proof that the acquisition was intended to undermine or damage competition providing mapping services.