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WSJ: FTC Reviewing Google’s Acquisition of Waze

Google recently confirmed its acquisition mobile map app maker Waze Inc. has prompted lawyers from the Federal Trade Commission to contact the search giant about the deal, according to a report from The Wall Street Journal.

FTC lawyers may have asked Google to not integrate Waze, pending its review, the Journal reported.

Last week, The New York Times Deal Professor Steve Davidoff, a law professor at Ohio State University, wrote that combining Google Maps with Waze “cements Google’s lead in map search” and “does so in a big way.” Davidoff said Google’s closing of the deal before filing for antitrust review was “an aggressive position” and was “playing hardball with the government here.” For more on Davidoff’s prediction that the U.S. government would take a closer look, see last week’s FairSearch blog post on his column here.

Typically, acquisitions are required to be submitted to the U.S. Department of Justice and Federal Trade Commission for review before the deal is closed so those agencies can examine whether the deal would “substantially lessen competition.” The FTC and DOJ can block a deal or require conditions be put in place before allowing it to close to ensure it does not harm competition.

Consumer Watchdog, a nonprofit public interest group, has called for the rejection of the deal because it would ultimately “allow Google access to even more data about online activity in a way that will increase its dominant position on the Internet.”

In April, FairSearch announced a complaint to the European Commission laying out Google’s anti-competitive strategy to dominate the mobile marketplace. Google’s acquisition of Waze is yet another tactic in this and would reduce the incentives for entrepreneurs to enter the mobile mapping space and invest in new innovative services that would benefit consumers.