The Justice Department’s antitrust division is currently evaluating Google’s proposed $32 billion acquisition of cybersecurity firm Wiz to determine if it would unlawfully restrict competition within the market, according to sources familiar with the matter.
Following the announcement of the deal in March, officials have been scrutinizing the details of the Alphabet subsidiary’s plan. Discussions have taken place with both the companies involved and their competitors and customers, as part of the preliminary investigation, according to individuals who requested anonymity due to the confidential nature of the review.
This inquiry is still in its early stages and may continue for several months. The outcome will be pivotal in deciding whether U.S. regulators will permit the transaction to move forward.
While comprehensive antitrust merger reviews are not commonplace relative to the total number of deals announced annually, there are indications that both parties were prepared for potential regulatory challenges. Bloomberg previously reported that Google agreed to a breakup fee of approximately $3.2 billion, or around 10 percent of the deal’s total value, should the acquisition not be completed.
Neither Google nor the Department of Justice provided comments regarding the ongoing review. A representative from Wiz did not respond to requests for statements about the matter.
Simultaneously, Google is facing rigorous antitrust investigations from federal authorities. Over the past year, federal courts determined that the company holds illegal monopolies in online search and specific advertising technology markets. Following these findings, Google could be forced to divest substantial parts of its operations, potentially affecting its Chrome web browser and several advertising tools that facilitate display ads across the internet.
Previous Acquisition
Wiz, known for its cloud security offerings, is not Google’s first foray into acquiring major cybersecurity firms. In 2022, Google completed the purchase of Mandiant for $5.4 billion. Both acquisitions aim to strengthen Google’s cloud computing services, which have historically trailed competitors like Microsoft. The DOJ did review the Mandiant deal but did not contest it.
Mandiant and Wiz offer complementary services, with Mandiant specializing in threat intelligence and incident response, while Wiz’s solutions focus on threat identification and mitigation across complex cloud infrastructures. Additionally, Wiz’s tools are compatible with services from major competitors such as Amazon, Oracle, and Microsoft.
In announcing the Wiz acquisition, Google highlighted that this move would enhance its cloud security capabilities and provide clients with innovative solutions to protect their systems, especially in the evolving landscape of artificial intelligence. The companies affirmed that Wiz’s products will remain functional across major cloud platforms, including those of competing firms.
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