OFT clears Google's takeover of Waze

Out-Law News | 12 Nov 2013 | 12:57 pm | 1 min. read

The Office of Fair Trading (OFT) has cleared Google's takeover of Israeli-based mapping technology company Waze Mobile after finding it does not raise competition concerns.

The regulator announced in August that it was reviewing whether the reported $966 million deal, completed in June, constituted a "relevant merger situation" under UK competition laws.

The OFT said that the combined business had more than a 25% share of the market for the supply of "turn-by turn navigation applications" for mobile devices in the UK. However, it said it did not believe Waze would become a significant competitor in the UK market and concluded that the merger between it and Google would not stifle innovation by rivals.

Waze developed a mobile app that allows drivers to plot routes avoiding traffic jams, police speed traps and other hazards. In June it announced it had agreed to join Google in a move it said would allow the company to "enhance [its] search capabilities" and help Google "in their ongoing efforts to build the best map of the world".

The OFT can assess competition concerns arising in the UK if the turnover of a company being acquired is £70 million or more or if it meets a 'share of supply' test. According to the OFT's merger guidelines, the 'share of supply' test is satisfied if the combining businesses "supply or acquire goods or services of a particular description" and would "after the merger collectively supply or acquire 25 per cent or more of those goods or services, in the UK as a whole or in a substantial part of it, provided that the merger results in an increment to that share."

If the OFT identifies substantive competition concerns, it can require merging companies to provide undertakings about how they will operate following an acquisition, or refer the transaction to the Competition Commission for a more detailed investigation.

The OFT's full decision clearing Google's takeover of Waze is not expected to be published for another two weeks.