Less than two weeks ago after Google said it was buying Waze, developer of a mobile mapping application, for a reported $1.1 billion, the Federal Trade Commission has stepped in and said in effect, “wait just a minute here.”
Word of the FTC’s antitrust investigation was originally reported over the weekend by the New York Post and later confirmed by Google. It came less than a week after Consumer Watchdog wrote the FTC and the Department of Justice urging them to reject the deal.
Both agencies have the authority to scrutinize acquisitions for antitrust concerns and it wasn’t clear which agency was likely to handle it.
I did the prudent thing and wrote both. It looks like the FTC is listening — or at least shares many of our concerns. The antitrust problems with this deal are blatant.
“Google already dominates the online mapping business with Google Maps. The Internet giant was able to muscle its way to dominance by unfairly favoring its own service ahead of such competitors as Mapquest in its online search results,” I wrote in my letters. “Now with the proposed Waze acquisition the Internet giant would remove the most viable competitor to Google Maps in the mobile space. Moreover, it will allow Google access to even more data about online activity in a way that will increase its dominant position on the Internet.”
Ironically, Waze CEO Noam Bardin has made one of the strongest cases against the deal. He publicly described Google as his only competitor at last May’s All Things Digital conference. He said, “What search is for the Web, maps are for mobile…We feel that 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.”
“You should take Bardin at his word,” I wrote in my letter to the FTC. “Approval of the Waze deal can only allow Google to remove any meaningful competition from the market. It will hurt consumers and hinder technological innovation. If the acquisition comes before the you, I urge you to reject it in the strongest possible terms.”
The investigation has just started, but the FTC is clearly off on the right foot.