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Google’s Waze deal is likely target in antitrust sweep

Google’s Waze deal is likely target in antitrust sweep
Business
The U.S. Federal Trade Commission just ordered major technology companies to fork over details on waves of small acquisitions made during the last decade. A more sizable deal is also seen as a target for the regulator: Google’s $1.1 billion (U.S.) purchase of mapping app Waze.

The FTC quickly approved the 2013 transaction, but antitrust experts say the regulator will take a second look because it combined two popular digital mapping services under the same corporate roof, eliminated a fast-growing Google rival and solidified the internet giant’s grip on valuable data.

Bilal Sayyed, the FTC’s director for the Office of Policy Planning, told reporters on Tuesday that the agency is planning to examine many deals that were reviewed in the past, while declining to share specific examples.

“Certainly, Waze is one of them,” said Robert Litan, a partner at Korein Tillery LLC and former Justice Department antitrust official. Google declined to comment.

Alphabet Inc.’s Google has acquired dozens of startups over the years to add technical talent, fill product holes, gather new users and accumulate more data. Few of these transactions rang traditional antitrust alarm bells, but in aggregate they helped the company build the western world’s largest online search, digital mapping and advertising businesses.

“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.”

Antitrust regulators in the U.K. launched a more in-depth investigation of the Waze deal, asking Google to keep Waze separate from the rest of its businesses while conducting the probe. The final report from the Office of Fair Trading, published in December 2013, cited concerns from other companies that Google was knocking out a threat to its mapping service. One complainant said “the acquisition removed Google’s closest competitor.”

Trustbusters didn’t have to rely on rivals. Waze Chief Executive Officer Noam Bardin offered the same assessment two months before joining Google. “We’re the only reasonable competition to (Google) in this market of creating maps that are really geared for mobile, for real-time, for consumers — for the new world that we’re moving into,” he said at an industry conference.

A Google spokeswoman said the company’s employees have created “more than 2,000 startups — including companies like Pinterest, Quip and Instagram — that’s orders of magnitude more than the number of companies we’ve acquired. We always seek to work constructively with regulators and we’re happy to provide information about our business.”

In late 2012, Apple Chief Executive Officer Tim Cook suggested his customers should use map apps, including Waze, sparking a surge of downloads.
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