TQ updated its readers a few days ago that Google could lose ownership of free social GPS service, Waze, because of some dicey filing tactics, which were adopted during the acquisition. Now it is officially confirmed by the search engine giant via The Wall Street Journal that the company is in trouble, as the acquisition will be reviewed by the FTC. Here is an excerpt from the original report: “Google on Saturday confirmed that it has been contacted by lawyers from the Federal Trade Commission over the company’s $1.1 billion acquisition of the mobile navigation company Waze, which closed in mid-June.
The FTC would have to determine whether Waze would have become a head-to-head competitor with Google, whose Google Maps software is the dominant digital mapping and navigation service around the world, or whether there is any evidence, such as emails, that showed Google wanted to acquire the company only to keep it from rivals.”
WSJ’s report asserts that “Waze’s revenue was too low to trigger an automatic review by the agency,” but it would able to review the deal once it gets closed. Google has to face this problem because the company did not make a Hart-Scott-Rodino filing earlier “by relying on an exemption. This filing is not required if the acquisition is of a foreign company that has sales and assets in the United States of less than $60.9 million. Waze is an Israeli company with headquarters in Silicon Valley, so it comes under this test.
Waze probably doesn’t have $50 million in revenue worldwide, yet the test also looks at assets. Given that Waze is worth $1 billion, it is hard to see that the value of its intellectual property in the United States business doesn’t meet the test. And the F.T.C. has previously indicated that companies should include this type of intellectual property in informal guidance …,” according to the New York Times report.
So now Google will not only face the review from the FTC, but it will also not be able to integrate Waze’s technology into its mapping app until the review is completed. According to the report “the FTC may have asked Google not to integrate with Waze” till the end of review. In brief, the Mountain View-based company will now have to wait for a green signal from the FTC before it could actually integrate Waze’s technology into its map app to offer users better service than before.
Source: 9to5Google
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