Google Inc (GOOG)’s Purchase Of Waze Reviewed By FTC

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Google Inc (NASDAQ:GOOG) is a part of yet another anti-trust investigation by the US Federal Trade Commission (FTC) over the acquisition of Waze, which is a navigation Start-up Company.


What’s the concern?

FTC is investigating whether or not the deal will reduce market choice for users, and follows from the claims made by the US pressure groups that the purchase of Waze will give Google Inc (NASDAQ:GOOG) a dominating position in mapping apps, says a report from Telegraph.

The revenue earned by Waze is well below the $70 million (£45 million) mark, which triggers the automatic investigation by FTC, but despite this regulator has the authority to look into any deals that it feel is suspicious.

Google’s acquisition on Waze

Earlier this month, Google Inc (NASDAQ:GOOG) acquired Waze for a $1 billion (£650 million), making the deal it’s fourth biggest to date. Waze uses crowd sourcing data from its 47 million subscribers to provide the accurate traffic and navigation information.

Waze founder Uri Levine, in January, termed Google as its only threat because “if it does what we are doing faster, it will win in the end.”

Google, whose online maps are already popular, acquired Waze following reports that both Facebook (NASDAQ:FB) and Apple (NASDAQ:AAPL) are also interested in the Israeli start up.

After the acquisition of Waze earlier this month, Google Inc (NASDAQ:GOOG)’s vice president for geo-products, Brian McClendon told that both companies will “operate separately for now”.

FTC’s investigation

The FTC can direct Google Inc (NASDAQ:GOOG) not to combine the operation until a final decision has been reached. However, to cancel the deal, watchdog will have to prove that the agreement will majorly impact the competitive environment in the mapping apps market.

The ongoing investigation by FTC will mainly concentrate on whether or not Waze might have grown into a serious threat to Google, and the acquisition is a strategy adopted by Google to keep the Israeli start-up away from the rivals like Apple and Facebook.

Earlier and ongoing investigations

Earlier this year, FTC concluded an investigation of Google Inc (NASDAQ:GOOG)’s search engine and search advertising, without actually asking for any changes. The US regulator is also looking into Google’s graphical advertising. The European Commission is also investigating the search engine giant over its internet search system.

There have not been any comments from Google Inc (NASDAQ:GOOG) yet on the matter.

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