A PYMNTS Company

Google’s Potential Acquisition of HubSpot Faces Regulatory Hurdles

 |  April 8, 2024

Google’s parent company Alphabet is contemplating an acquisition of HubSpot, a leading CRM software provider. However, such a deal is likely to encounter significant regulatory opposition despite experts suggesting it would not significantly stifle competition.

According to a recent report by Reuters, Google has been deliberating over a potential bid for HubSpot, which boasts a market value of $34 billion. The tech giant is carefully assessing the antitrust risks associated with the acquisition and has yet to make a final decision.

Despite concerns from antitrust regulators, nearly a dozen experts and industry analysts have indicated that Google’s acquisition of HubSpot would unlikely have a detrimental impact on competition. They argue that the customer relationship management (CRM) software sector, where HubSpot operates, is already well-served by major players such as Salesforce, Adobe, Microsoft, and Oracle. Notably, Google does not currently compete in the CRM market.

Read more: Google’s US Ad Antitrust Suit Trial Date Set For March 2024

Furthermore, experts suggest that HubSpot could become a stronger competitor in the CRM space with access to Google’s cloud-computing resources, potentially improving offerings and prices for customers. According to research by Gartner, HubSpot held a 4.9% market share in the CRM marketing software industry in 2022, while Salesforce and Adobe each commanded a 15% share.

However, despite the perceived minimal impact on competition, experts anticipate significant challenges from U.S. and European antitrust regulators if Google proceeds with the acquisition. There is a growing apprehension among regulators about allowing technology giants to expand their dominance through acquisitions.

Seth Bloom, a former general counsel of the U.S. Senate antitrust subcommittee, expressed skepticism about the deal’s prospects with regulators. He suggested that Google would need to be prepared for a protracted legal battle to justify the acquisition’s merits. Convincing HubSpot to support the deal would also be crucial in navigating regulatory hurdles.

Source: Reuters