Google’s Plan to Buy Security Firm Wiz Gets Antitrust Review

Justice Department antitrust enforcers are reviewing whether Google’s planned $32 billion acquisition of cybersecurity company Wiz Inc. would illegally limit competition in the marketplace, according to people with knowledge of the matter.

Officials in the department’s antitrust division, who are probing the deal, have been examining the contours of the Alphabet Inc. unit’s plan following its announcement in March, said the people, who asked not to be identified discussing a confidential matter. Such inquiries include discussions with the merging companies as well as competitors and customers.

The review, which is in its early stages, could last months more. It will ultimately determine whether US officials let the deal proceed.

Although full-scale antitrust merger reviews are relatively rare compared to the number of deals announced each year, there are signs that the firms were bracing for scrutiny. Google agreed to pay Wiz a breakup fee of about $3.2 billion, or about 10% of the deal value, if it doesn’t close, Bloomberg previously reported.

Read More: Google Agrees to Buy Cloud Security Firm Wiz for $32 Billion

Spokespeople for Google and the DOJ declined to comment on the review. A spokesperson for Wiz didn’t respond to a request for comment.

Meanwhile, Google has been facing intense antitrust scrutiny from Washington. In the past year, the search engine firm was found by federal judges to have illegal monopolies in online search and some advertising technology markets. Following those two rulings, it is facing a potential breakup of large parts of its business, including its Chrome web browser and some advertising tools used to place display ads around the web.

Previous Acquisition

Wiz, which provides cloud security, wouldn’t be Google’s first purchase of a large cybersecurity firm. In 2022, it bought Mandiant for $5.4 billion. Both deals are meant to bulk up the company’s cloud computing business, which has historically lagged its peers, including Microsoft Corp. The DOJ also reviewed the Mandiant deal, but never challenged the transaction.

Mandiant and Wiz provide complimentary services, with the former specializing in threat intelligence and cyber breaches. Wiz offers similar capabilities but its tools also work to identify and block threats across organizations’ often-complex cloud environments. Wiz also works with competing services from Amazon.com Inc., Oracle Corp. and Microsoft.

When announcing the deal, Google said the Wiz acquisition was a way to beef up its cloud security offerings and provide customers with new ways to keep their systems secure in a new era of AI. The companies said Wiz’s products will continue to work on major cloud platforms, including competing services.

--With assistance from Davey Alba.

To contact the reporter on this story:
Josh Sisco in San Francisco at jsisco6@bloomberg.net

To contact the editors responsible for this story:
Ben Bain at bbain2@bloomberg.net

Andrew Martin

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