When rumours first indicated that Google could possibly lose the ownership of recently acquired free social GPS service Waze that had been bought for one billion US dollars, the reported sounded a bit bizarre. However, a Ohio State University’s law professor believes that it can happen and in a write up for the New York Times he claimed that according to law, companies needs to make a Hart-Scott-Rodino filing, if they have plans to acquire another business in the future so that the proposed deal could be checked for anti-trust issues before a deal takes place. But it seems that Google has not made that filing.
“According to a person close to Google, the company skipped the Hart-Scott-Rodino filing 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 …”
Shedding light over this issue, Professor Steven M. Davidoff from Michael E. Moritz College of Law at Ohio State University said that since both Microsoft and Facebook were also in the race to acquire Waze therefore Google might have decided to wrap up the deal as soon as possible on the ‘easier to get forgiveness than permission’ principle. Due to this reason Professor Davidoff believe that it was a risk.
“But given the publicity over the acquisition, the government will almost certainly step in to review. Consumer groups are circling, and the Consumer Watchdog Group has written the government to ask for an in-depth review. […] As with previous deals, the government can force Google to sell Waze, or put other restrictions in place, if there is a problem. […]
At the least, this all means that the Waze acquisition is likely to get a thorough review by the government. The battle will now begin. That Google will keep Waze without restrictions is no certainty. But the government faces a challenge. If it does decide to try to unwind this acquisition, Google is going to push the bounds of the law as hard as it can. The future of map search is at stake, and Google may not be evil, but this is business.”
Source: 9to5Google
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