The euphoria in Israel over the $1.1 billion Google purchase of Waze may be short-lived, as news broke of a U.S. Federal Trade Commission (FTC) probe that could scuttle the whole deal.
The FTC will examine whether the acquisition of the Israeli navigation software firm violates U.S. antitrust law, Globes said, quoting The New York Post on Sunday.
Google reportedly failed to submit the deal for clearance by the FTC because Waze’s U.S. revenue is less than $70 million. But in view of the fact that Google effectively “swallowed up” one of its main competitors in the online mapping market, regulatory officials are preparing to scrutinize the buy.
Last week, a U.S. consumer organization, “Consumer Watchdog,” called on the antitrust agencies to block Google’s acquisition of Waze, because it will give Google Maps, which already has a huge lead over other competitors, an unfair advantage in the marketplace.
In April, Waze CEO Noam Bardin said that Google was Waze’s only real competitor. “We feel that we are the only reasonable competition to them in this market of creating maps that are really geared for mobile, for real-time, for consumers, and for the new world we’re moving into,” he said.
The FTC declined to comment.