US competition watchdog takes a closer look at the navigation market
Google has confirmed it has become the target of yet another investigation by the US Federal Trade Commission (FTC), which is looking at the company’s recent acquisition of navigation software developer Waze.
Waze for Android and iOS is a free app that learns from users’ driving times and patterns to optimise routing and provide real-time traffic updates. It relies on crowdsourcing for map data and other information – drivers can report accidents, traffic jams, speed traps and police presence, as well as updating roads and landmarks.
At the moment the mobile app has almost 50 million users, and much like Google Maps, Waze makes its money through location-based advertising.
In June, Google agreed to buy the start-up for $1.1 million. Under the terms of the deal, Waze would keep its headquarters in Israel and remain relatively independent for the next three years. Meanwhile, Google would use technology developed by Waze to enhance its own navigation products.
According to the Wall Street Journal, even though this was fourth largest acquisition in Google’s history,Waze’s revenue wasn’t high enough to warrant an automatic investigation by the FTC. But the government agency can choose to review deals even after closing, if it thinks they will have a negative impact on competitiveness of the market.
Now, the FTC will look at whether Waze could have developed into a Google Maps competitor, and if it was bought by Google just to keep it from falling into the hands of rivals like Apple or Facebook – a motive suggested by several analysts at the time.
Earlier this year, another FTC investigation concluded that Google didn’t abuse its dominant position in the Web search market. In a separate inquiry, the government agency is currently looking at Google’s advertising business.
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