The far-reaching global impact that cybersecurity and its failures can have was made clear on Friday, when a Microsoft Azure outage (reportedly caused by CrowdStrike, Azure’s first line of cyber defense) left thousands of computer users staring at frozen blue screens and unable to work.
The far-reaching global impact that cybersecurity and its failures can have was made clear on Friday, when a Microsoft Azure outage (reportedly caused by CrowdStrike, Azure’s first line of cyber defense) left thousands of computer users staring at frozen blue screens and unable to work.
This has led to airlines, media companies, banks, etc., bowing out in various markets, including India. Cybersecurity has now become so crucial in the tech world that Google’s parent company Alphabet wants to acquire cybersecurity startup Wizz, even if it means facing antitrust investigations from regulators around the world, according to a New York Times report.
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This has led to airlines, media companies, banks, etc., bowing out in various markets, including India. Cybersecurity has now become so crucial in the tech world that Google’s parent company Alphabet wants to acquire cybersecurity startup Wizz, even if it means facing antitrust investigations from regulators around the world, according to a New York Times report.
Acquisitions are essential for companies to grow and innovate, but Google’s dominance in many areas has put it under antitrust scrutiny.
If the deal goes through, it would be Google’s biggest acquisition ever. The company plans to buy Wizz for about $26 billion. (nyti.ms/3LwtPFw) It’s no surprise that Google wants to lead in cybersecurity. The move would bolster the company’s cloud services. The company’s Google Cloud division, run by my classmate Thomas Kurian, has lagged behind Amazon and Microsoft.
In the United States, the Federal Trade Commission and the Department of Justice are the primary enforcers of these antitrust laws. In the EU, the European Commission plays a similar role. These agencies scrutinize mergers and acquisitions to make sure they don’t harm consumers by stifling competition, raising prices, or stifling innovation.
Google is no stranger to these regulators: its dominance in search, online advertising and mobile operating systems means the company is under intense scrutiny, and recent high-profile antitrust cases, such as the EC fines imposed on Google for anti-competitive behaviour in Android and its search business, highlight the regulators’ vigilance.
Despite intense scrutiny, Google has been successful in making some significant acquisitions. The key has been to combine strategic planning with regulatory compliance and leverage our own resources to make a compelling case for the benefits of the acquisition.
The company publicly shares its vision for the acquisition, highlighting innovation and the positive impact on user experience. This slick marketing of transparency helps engender trust and blunt any backlash from the public and regulators.
A key aspect of the company’s strategy is to acquire companies with valuable datasets and AI capabilities to leverage data and artificial intelligence (AI) to enhance its own products and services. For example, its acquisition of DeepMind in 2015 bolstered Google’s AI research, leading to rapid advances.
Such acquisitions raise antitrust concerns, particularly around data privacy and market power, which Google has addressed by insisting that it maintains strict data separation between its existing services and the entities it acquires.
Google often targets companies that it believes complement its own business and can drive innovation. For example, YouTube was acquired in 2006 and Android in 2005. At the time, both were seen as high-potential platforms. YouTube has since become the world’s largest video platform (and second-largest search engine), and Android is found on most of the world’s smartphones.
These acquisitions were justified by regulators on the grounds that they would expand consumer choice and foster innovation. The company’s acquisitions also often capitalize on broader market trends or competitive dynamics. The company’s 2014 acquisition of Nest gave it a foothold in the fast-growing global smart home market, enabling it to compete with Amazon in that space.
Whenever Google pursues a target, it prepares meticulous regulatory filings and actively negotiates with regulators, often long before a deal is made public, sometimes making concessions to win approval. When it bought Fitbit in 2021, the company promised not to use health data for advertising.
This promise was crucial in easing regulators’ concerns about data privacy and market power, and Fitbit also agreed to maintain open access to its application programming interfaces for third-party developers to allow competition.
Google’s approach to Wiz is no different. Cybersecurity is a pressing issue in cloud computing. About 85% of the world’s largest organizations report at least one significant breach per year, and more than 50% report two or more breaches. With strong cybersecurity solutions, Google Cloud could emerge as a leader. Microsoft’s outages have worsened its position as a competitor.
Attitudes towards Google acquisitions vary by region. The EU has strict antitrust laws, while the US’s laissez-faire attitude may change as calls for stricter rules grow. Its acquisition of DoubleClick in 2008 was scrutinized in both the US and the EU. The deal was ultimately approved, but Google must assure regulators that it would not negatively affect the online advertising market.
As Google gets bigger, it will need to tread carefully, but the company’s track record demonstrates a sophisticated understanding of the regulatory environment and a proactive approach to addressing monopoly concerns.
Google’s ability to make large acquisitions despite intense antitrust scrutiny is a testament to the company’s strategic acumen. By focusing on innovation, actively working with regulators, and maintaining transparency in its dealings, the company has navigated complex landscapes and continues to evolve.
Our approach will undoubtedly evolve as the regulatory environment tightens, but our core strategies of compliance and innovation will remain central to our success.
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