Google revealed that Federal Trade Commission attorneys are investigating its $1.1 billion acquisition of Israeli crowdsourced location services firm Waze.
A Google spokesperson confirmed the rumored antitrust review to The Wall Street Journal but declined to comment on details. Lawyers familiar with the antitrust investigation process say the FTC may have asked Google to halt integration with Waze, pending the outcome of its review. Representatives of the agency did not respond to a request for comment.
Waze is a crowdsourced location services app that offers turn-by-turn GPS navigation, traffic reports and social networking features to users on the go. Over 47 million drivers use Waze apps across Google's Android and Apple's iOS platforms. Apple also licenses data from Waze for its Apple Maps service.
Google agreed to purchase Waze earlier this month, announcing the firm will continue to operate independently and remain in its native Israel. The FTC must identify whether Waze would have become a direct competitor to Google's market-leading Maps service or if Google acquired the startup to keep it out of the clutches of the company's competitors. Google reportedly was one of several tech giants courting Waze: Facebook also entered merger negotiations, but it ended the talks because of Waze's reluctance to relocate to the U.S.
Some antitrust lawyers told The Wall Street Journal that it is unlikely the FTC would ask Google to dissolve the deal, explaining the agency would have to dig up evidence suggesting the agreement will hamper competition in the mapping market.
Immediately after the acquisition was announced, Consumer Watchdog Privacy Project Director John Simpson sent a letter to William J. Baer, assistant attorney general in the Department of Justice's Antitrust Division, urging the agency to block the deal. "Google already dominates the online mapping business with Google Maps," Simpson wrote. "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. 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… 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."
