Posted 06/24/2013 at 1:08 PM
Posted 4 years ago
Earlier this month, Google announced on its blog that it had acquired Waze, a mapping app start-up from an Israeli company of the same name. At the time, no real details of the deal were disclosed; however, it has now been revealed that the Mountain View-based company parted with a cool $1.1 billion for the app. The deal itself is not the real talking point here though, after Google revealed over the weekend that it is under review from the Federal Trade Commission (FTC) over the legality of the purchase.
According to a report in the Wall Street Journal on Saturday (June 22, 2013), Google confirmed that the FTC had been in touch regarding Waze, but chose not to comment on the antitrust review. If the FTC is able to uncover any evidence that suggests the purchase of Waze significantly hampers market competition, Google may be asked to unwind the deal, although antitrust lawyers believe this is unlikely to happen.
The paper also notes that while Waze’s revenue is too low to trigger an automatic review, the FTC has the option of examining deals even after they close, and has chosen to exercise that power here.
The aim of the agency’s review will be to decide whether Waze would have been a competitor of Google Maps and was purchased purely to prevent rivals from using the app for their own gains. Before the Android-maker stepped in to purchase the mapping service, Facebook were known to be in talks and Apple was said to be very interested as well.
Waze was founded back in 2007 and has a strong user base, providing smartphone users in 193 countries with directions and alternative routes around traffic via the help of other drivers.
Consumer Watchdog has already complained to the FTC about the deal eliminating a potential competitor of Google. The search engine giant now has to hope that the commission does not see it the same way.