US pressure group asks Department of Justice to investigate search giant's $1.3bn takeover of Israel-based traffic app
The US Department of Justice has been urged to block Google's $1.3bn acquisition of the traffic app Waze, on antitrust grounds.
John Simpson, the privacy project director of Consumer Watchdog, a US pressure group, has written a letter to the DoJ warning that allowing the acquisition "would remove the most viable competitor to Google Maps in the mobile space".
Simpson writes that "Google already dominates the online mapping business" and alleges that the company "was able to muscle its way to dominance by unfairly favouring its own services" ahead of competitors, through its power in the search business.
If the DoJ takes up the case, it would add to a growing number of antitrust investigations in progress against Google. In the US the Federal Trade Commission is investigating whether the company has broken antitrust rules in its sales of online display ads, while in Europe its dominance of search is the target of a long-running European Commission investigation in which it has been told to revise its presentation of search results. Simpson has also asked the FTC to determine whether it should investigate the takeover.
Google and Waze, from Israel, announced the purchase on Tuesday after acquisition talks which are said to have also involved Facebook, which had been interested in Waze's social element.
Waze's chief executive, Noam Bardin, said in a blogpost about the takeover that he had considered whether to seek a public listing, to keep the company independent, but added that "an IPO [initial public offering] often shifts attention to bankers, lawyers and the happiness of Wall Street, and we decided we'd rather spend our time with you, the Waze community."
Waze, which has nearly 50 million users worldwide, is a free smartphone app that provides driving directions and crowdsourced feedback which can warn of traffic problems. Google's Android mobile system has hundreds of milllions of users, and also offers free navigation. But Waze users specifically choose to use the app, making them more loyal and their data more valuable.
Google said in a blogpost about the buyout that Waze will "operate separately for now".
The largest rival to Google in the mobile space may be Apple, which last year removed Google as the default mapping app from its iPhone, replacing it with its own iOS 6 Maps app. Apple says it has hundreds of millions of iPhone users worldwide, 93% of whom are using iOS 6. But it is unclear how many use the iOS 6 Maps app for navigation, after it was widely criticised on release. Apple buys some traffic data from Waze for use in the app.
Consumer Watchdog is concerned that Google and Waze will merge their operations, which "will allow Google access to even more data about online activity in a way that will increase its dominant position on the internet". It pointed to the fact that the FTC's approval of Google's DoubleClick display business acquisition in 2008 "tipped Google to a search advertising monopoly" – which the FTC is now investigating.