Google has confirmed to the Wall Street Journal that the company has been contacted by the Federal Trade Commission for an official antitrust review of Google's $1.1 billion (£716 million) acquisition of Waze, announced earlier this month.
Neither Google representatives nor representatives from the Federal Trade Commission are officially saying anything beyond that. However, sources speaking to the New York Post say that Google didn't believe its acquisition met the threshold required for review, given that Waze's annual revenues were less than $70 million (£45.5 million).
The Wall Street Journal's report confirms this fact, noting that Waze's revenues were too low for the deal to receive an automatic FTC review. However, regulators do have the authority to come in after the fact to ensure that everything is tip-top.
In the case of Google and Waze, they'll likely be looking to examine whether Google picked up what might have eventually been the company's chief rival to Google Maps. Additionally, regulators will be interested in finding out whether Google acquired Waze merely to prevent its rivals from doing so.
In fact, these key areas that regulators will be scrutinising were some of the issues brought up by the non-profit Consumer Watchdog, which wrote a letter to the FTC criticising Google's acquisition of Waze shortly after the deal was announced.
"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. Now with the proposed Waze acquisition the Internet giant would remove the most viable competitor to Google Maps in the mobile space," wrote John Simpson, privacy project director for Consumer Watchdog, in a 12 June letter.
"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."
Of course, it doesn't really help Google's case that Waze CEO Noam Bardin described Waze earlier this month as, "the only reasonable competition to [Google] in this market of creating apps that are really geared for mobile, for real-time, for consumers – for the new world that we're moving into."
If the FTC review goes south for Google, the company could be forced to sell off Waze and eat whatever loss it might incur. You may all now commence speculation on which of Waze's three rumoured previous suitors would be most interested in picking the company up at a discount, were that to happen: Apple, Microsoft, or Facebook.
Waze has been downloaded by approximately 45 million users.