The U.S. Federal Trade Commission (FTC) is investigating acquisitions made by big tech firms in the past 10 years and has a special focus on Google’s $1.1 billion purchase of mapping app Waze, Bloomberg reported on Friday (Feb. 14).
In June 2013, the FTC approved Google’s acquisition of the Israeli company behind the crowdsourced navigation app Waze. It was different from Google’s own Maps, in that users could exchange information about police in the area or traffic-causing construction. Waze was considered by some to be part social media site, part navigation app.
Antitrust experts said the FTC is now looking back on the acquisition because it put the two most popular mapping apps under the ownership of the same company — Google. The FTC said owning both gave Google control over and access to even more user data. Further, by purchasing Waze, Google got rid of its main competitor.
Bilal Sayyed, the FTC’s director for the Office of Policy Planning, told reporters on Tuesday (Feb. 11) that it is taking another look at several deals from the past.
“Certainly, Waze is one of them,” said Robert Litan, a partner at Korein Tillery LLC and former Justice Department antitrust official.
Google’s many acquisitions led to it becoming the leader in search, mapping and advertising, which has now global watchdogs asking whether this dominance hurts businesses and customers. Reviewing earlier acquisitions can help answer any questions. The agency said the Waze deal is a clear case that needs review.
“It was literally Google acquiring its number one competitor in maps,” said Sally Hubbard, director of enforcement strategy at the Open Markets Institute, which is pushing for a crackdown on big internet platforms. “It was a bad deal that should have been blocked.”
When Google announced the deal, Mark Mahaney, an analyst at RBC Capital Markets, said the “move eliminates Waze as a potential acquisition target for competitors who could use the app’s collection of data and 50 million users to bolster their own location-based products.”
The FTC’s investigation into the biggest five tech companies in the U.S. expanded into an inquiry about acquisitions last week. The FTC is investigating Apple, Amazon, Facebook, Alphabet and Microsoft over antitrust implications, and it recently asked the companies to turn over information regarding takeovers of smaller companies between the years of 2010 and 2019.