Wednesday 13 December 2017

Google's purchase of map app Waze investigated by FTC


Olivia Goldhill

Google is the subject of an anti-trust investigation by the US Federal Trade Commission (FTC) over their deal with navigation start-up company Waze.

The FTC's review of whether Google's Waze deal will reduce market choice is part of a series of anti-trust investigations against the company and follows claims from US pressure groups that the Waze takeover would make Google too dominant in mapping apps.

Although Waze's revenue is below the $70m level where FTC would automatically investigate, the watchdog can look into any deals that might limit consumer choice.

Google purchased Waze, an app that uses crowd sourcing data from its 47m subscribers to provide up-to-date information about traffic and navigation, earlier this month in a $1bn deal which was the fourth largest in the internet search giant's history.

In January this year, Waze founder Uri Levine said Google was the start up's only threat. He said: "Waze has only one competitor - Google. Google is our main threat, because if it does what we are doing faster, it will win in the end."

Google is already one of the most popular online maps providers and bought Waze following reports that both Facebook and Apple had approached the Israeli start up.

When Google announced the Waze purchase earlier this month, Brian McClendon, Google's vice president for geo-products said the two companies would "operate separately for now".

The FTC could now ask Google not to combine the two operations before a final decision is made, but to break up the deal the FTC would have to prove that the takeover would significantly hurt competition in the mapping apps market.

FTC's investigation is expected to focus on whether Waze would have become a serious competitor to Google and whether the company only wanted to buy Waze to keep the start up separate from rivals.

The US watchdog has already completed a review earlier this year of Google's search engine and search advertising without demanding any changes, and has also begun looking into Google's graphical advertising. Google has also been investigated by the European Commission over its internet search system.

Google declined to comment.

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