FTC Opens Antitrust Probe Into Google-Waze Deal
Israeli mapping company Waze recently accepted a $1.1 billion buyout offer from Google, reportedly rebuffing competing offers from Microsoft, Apple and Facebook.
But those other tech companies might get a second chance to buy Waze. That's because the Federal Trade Commission reportedly has opened an antitrust investigation into Google's purchase of the social-mapping company. Should the FTC decide the deal harms competition, the agency potentially could order Google to divest its new acquisition.
Waze is a mobile app that incorporates traffic-condition data, provided by users, into its maps. The company currently has around 50 million users, according to press reports.
Whether the FTC will decide that the deal violates antitrust law remains to be seen. So far, Google has had mixed results when it comes to antitrust run-ins. Earlier this year, the company fended off legal action by convincing the FTC to close its 20-month investigation into whether the company wrongly promoted its own services in the search results.
Then-chairman Jon Leibowitz said the agency found that Google's primary reason for touting its own offerings in the search results was "to improve the user experience," as opposed to harming potential competitors.
Google also prevailed upon the FTC to approve the company's $3.1 billion merger with DoubleClick in 2007. At the time, the FTC said the deal wasn't likely to harm competition in online advertising.
But the following year, Google ended up nixing a proposed search-ad partnership with Yahoo due to opposition by the Department of Justice. That deal called for Google to power a small proportion of Yahoo's search ads. (After that agreement unraveled, Microsoft and Yahoo combined their search platforms in hopes of better competing with Google.)
News of the Waze probe was cheered by the advocacy group Consumer Watchdog, which often criticizes Google. “The investigation has just started, but the FTC is clearly off on the right foot,” Consumer Watchdog said in a statement issued on Monday.
The organization requested an antitrust probe as soon as the deal was announced. “Google already dominates the online mapping business with Google Maps,” Consumer Watchdog wrote in a letter to the FTC and the Department of Justice. “Now with the proposed Waze acquisition the Internet giant would remove the most viable competitor to Google Maps in the mobile space. Moreover, it will allow Google access to even more data about online activity in a way that will increase its dominant position on the Internet.”