Will regulators block the Google-Wiz deal?

Two months have passed since Google announced it is acquiring Israeli cybersecurity company Wiz for $32 billion – the biggest ever deal for the acquisition of an Israeli startup. This amount will make hundreds of employees into multimillionaires as well as a small number of billionaires and make even richer a range of large funds including Sequoia, Andreessen Horowitz and Greylock. But regulatory approvals from antitrust authorities in countries in which Wiz operates could delay completion of the deal.

Due to the size of the deal and the nature of the buyer as a global search engine monopoly, regulators are expected to conduct a greater number of investigations before approving the deal, and many estimate that the process is expected to take up to a year from the announcement in March 2025. A more optimistic scenario, as was the case with Google’s $5.4 billion acquisition of cybersecurity company Mandiant sees approval within only six months, although this is a much bigger deal.

In order to avoid scrutiny from the authorities as much as possible, Google declared in its acquisition announcement that Wiz would continue to serve rival Microsoft and Amazon cloud platforms and that it recognizes the importance of “multi-cloud”, an unusual statement. It is clear to everyone that Wiz’s huge value is because it also provides services to Google’s competitors, and if this were stopped, Wiz would struggle to survive.

The regulator’s concern is reflected in the $3.2 billion compensation Wiz has asked from Google if the deal collapses. And not without reason, if the deal is canceled after a year or 18 months of scrutiny, it would be a fatal blow for Wiz, which, for the time being, is seen as a single cloud provider.

The US will not cause difficulties

Three major regulators stand between Wiz’s investors and employees and their money, and each of them examines the deal with a slightly different eye: the US, the UK, which has adopted a separate regulatory framework, and the EU, with an emphasis on countries where Google is more active, such as Ireland, for example.

The authority that is expected to pose as few obstacles as possible to the deal is the US Trade Commission (FTC), headed by the new chairman appointed by President Donald Trump, Andrew Ferguson. The latter is known to have a much higher tolerance for mergers and acquisitions of big tech companies, unlike his predecessor Lina Kahn, whose belligerence against the tech giants was part of the approach that brought her to office in the first place.

In contrast, Ferguson has already managed to close the investigation into Amazon for using personal data tracking to make price adjustments to users, and according to industry estimates, has given Google pre-ruling approval for the Wiz acquisition. This approval, even if not yet issued in a final and official manner, is what probably gave both parties the confidence to close the deal. Trump himself, who was elected, among other things, with the support of senior figures in Silicon Valley such as Elon Musk and Peter Thiel, has hinted that he will facilitate mergers and acquisitions of big tech companies in the US.

The FTC and the Department of Justice have eased up on Google in investigations conducted since Ferguson took office, and the demand to spin off its AI business has been dropped, although criticism on the matter has not ended. The FTC is still demanding that Google part ways with Chrome to reduce its control over referring users to its search engine on mobile phones, and its ability to gather data about users. The FTC is also pressing to cancel its exclusivity agreement to integrate its search engine into iPhones, where the giant could take an image hit with the integration of rival Perplexity.

Just last week, the FTC expressed support for a new demand by the Justice Department to share with search competitors, such as Microsoft, data collected by the company regarding user searches. There is no doubt that the authorities see Google as a monopoly in the search sector – in August this assessment received official confirmation with a ruling by a federal court judge.

As a cloud company, Google is the third biggest player in a multi-player market. As of the first quarter of 2025, it holds a 12% market share. Microsoft Azure has a 22% market share, while Amazon Web Services (AWS) leads with a 29% market share. But Google’s cloud activity is the fastest growing of the three and it has managed to increase its market share by 1%, while Microsoft and Amazon previously held larger market shares. Overall the US regulator is likely to approve the Google-Waze deal, while continuing to investigate the search engine sector.

What will Google prove to the UK?

The situation in the UK is different. The British are believed to be skeptical about Google’s plans to let Wiz remain an autonomous company that does not favor one cloud or another, and will demand economic analyses that prove that Google has no incentive to bring about such a preference. There is concern in the industry that even if Google leaves Wiz free to work with rivals, it will still be able to use data collected by Wiz to its advantage, and there is also a converse concern that Microsoft and Amazon will reduce their willingness to cooperate with Wiz over time.

Epstein Rosenblum Maoz (ERM) law firm partner and head of competition and antitrust Adv. Tamar Dolev-Green says, “An antitrust authority that claims to be concerned about future moves by merging entities must show the ability and incentive to realize the concern. It is reasonable to assume, especially if the authority presents such an analysis, that Google will also want to submit a calculation that shows that the continued existence of Wiz as an agnostic company is economically preferable for it. The UK and EU authorities are stricter and more stringent than their counterparts in the US when it comes to US big tech. In cases that raise doubts for them, they tend to demand large amounts of data and even ask to see the internal correspondence that reveals the motivation behind the acquisition.”

The UK Competition and Markets Authority recently relaxed the law so that no prior notification of such a merger is required, except for companies defined as having strategic market status (SMS). The Authority recently announced that it is examining the possibility of granting Google SMS status, but only in the mobile sector, alongside Apple. In the cloud sector, a study by the Authority names Microsoft and Amazon as dominating the UK market, with a share of up to 40% each, and even recommends granting them SMS status. Google is seen as the small player, and yet, the UK sees the market “with high barriers to entry,” meaning a market with a special status in which deals must be examined separately.

Foot dragging in Europe

In Europe, Wiz may meet anti-Israeli sentiment that could make it difficult to advance the deal, especially in relatively hostile countries such as Ireland or France – whose relationship with the Trump administration has also weakened. Since most of Wiz’s sales are in the US anyway, it is estimated that even if there is some foot dragging by the EU, the deal will not be rejected. However, in large mergers there is coordination between the authorities in the various countries, “So a situation is not created where one moves ahead while the other stalls. Therefore, if someone objects, the others will wait for them,” explains Firon law firm partner and head of the competition department Adv. Mazor Matzkevich.

Matzkevich adds, “On the surface, it seems that there are no competition problems in the cloud market and even in the cybersecurity market in which Wiz operates. Even if there is concern about an extreme case in which Google uses Wiz for its needs at the expense of rivals, it could be handled by allowing Microsoft and Amazon to turn to the solutions of the many competitors or develop one of their own. It is difficult for me to see how such a merger could be stopped, although it is certainly possible that the process will take time.”

Published by Globes, Israel business news – en.globes.co.il – on May 20, 2025.

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