June 23, 2013
Google Waze Purchase Under FTC Scrutiny
redOrbit Staff & Wire Reports - Your Universe Online
Google has confirmed that it has been contacted by US regulators regarding its acquisition of social mapping application Waze, suggesting the billion-dollar purchase will be the target of an antitrust investigation.
In confirming the Mountain View, California-based tech giant had been contacted by the Federal Trade Commission (FTC), company spokeswoman Niki Fenwick would not discuss the possibility of such a probe, Bloomberg’s Brian Womack reported on Friday.
However, Josh Kosman and Garett Sloane of the New York Post are reporting that the FTC has indeed opened an investigation into the June 11 deal, which was worth a reported $1.3 billion.
Citing two unnamed sources, Kosman and Sloane said the probe was coming even though both parties involved believed it had closed earlier this month, and that Google felt it did not need to submit the deal for review because Waze’s revenue in the US was less than $70 million.
It is “unlikely” the acquisition will be nullified, “as the FTC would, at this point, need to provide evidence that the combination of companies would ‘significantly crimp competition in the mapping market,’” explained Ray Willington of HotHardware. “Given how few (relatively) users Waze has, that's unlikely to be the case.”
At the time of its acquisition, the Israel-based mapping service had approximately 50 million users, according to Juan Carlos Perez of IDG News Service. Waze CEO Noam Bardin had also just opted against taking the company public and had considered several other options regarding the company’s future before deciding to sell to Google.
The reported $1.3 billion price tag is said to be the fourth largest sum Google has ever paid in order to acquire another business, and reports at the time the deal was first announced suggested it was less about the company’s efforts to improve its own mapping service and more about preventing rivals Apple or Facebook from acquiring the crowdsourced software.
Waze allows users of its mobile app to share road reports and traffic conditions in real time, allowing other motorists to make adjustments to their routes as needed. The program can also be used to report possible road hazards and even speed traps, essentially turning each user’s smartphone into a mobile travel reporter.