Written by Milana Vin and Anirban Sen
(Reuters) – Google parent Alphabet's planned acquisition of marketing software company HubSpot could spark opposition from regulators, even though many experts agree it won't stifle competition. is high, and tech giants will have to open a new front in the fight against antitrust watchdogs.
Reuters reported last week that Google is considering a takeover bid for HubSpot, which has a market value of $34 billion. Google is considering the antitrust risks of a potential deal but has not yet decided whether to make an offer.
More than a dozen antitrust experts and industry analysts said in interviews and analyst notes that a Google acquisition is unlikely to stifle competition.
They say this is because the so-called customer relationship management (CRM) software sector in which HubSpot operates is already serviced by several major companies, including Salesforce, Adobe, Microsoft, and Oracle. states. Google does not compete in the CRM space, and the acquisition could make HubSpot a stronger player thanks to Google's cloud computing resources, improving service and pricing for customers, they said. added.
In the CRM marketing software industry, HubSpot, which focuses on small customers, had a 4.9% market share in 2022, while Salesforce and Adobe each held a 15% share, according to technology researcher Gartner. .
But these experts also said Google's acquisition of HubSpot could spark challenges from antitrust regulators in the U.S. and Europe, given the growing aversion among tech giants to getting big through acquisitions. He also said that his sexuality was very high.
He added that Google will have to aggressively argue the merits of the deal in a lengthy legal battle and will need to convince HubSpot to do the same.
“The first thing I think is that such a deal would be met with a pretty tough response from antitrust regulators,'' said Seth Bloom, a former general counsel for the U.S. Senate Antitrust Subcommittee who now runs his own advisory firm. It’s a reaction,” he said.
Google and HubSpot did not respond to requests for comment.
Google already faces several antitrust claims, including two lawsuits from the US Department of Justice. One accuses it of abusing its position as the online search leader, while the other claims it monopolizes the digital advertising market.
A Justice Department spokeswoman did not respond to a request for comment.
The regulatory realm for Google is also strict in Europe. The company is investigating technology being investigated by the European Union for possible violations of new digital markets laws that allow people to move more easily between competing online services such as social media platforms, internet browsers and app stores. It is one of the companies.
A spokesperson for the European Commission, which acts as the European Union's enforcement arm and has previously fined Google for anticompetitive practices in online search, did not respond to a request for comment.
pile of cash
Intense antitrust scrutiny has deterred most tech giants from pursuing mega-deals. The last major acquisition completed was Microsoft's $69 billion deal to acquire “Call of Duty” maker Activision Blizzard, with the Xbox console maker giving up streaming rights to Activision's games. It was only possible to pass UK regulators after agreeing to the following:
In December, Adobe shelved a $20 billion deal for its cloud-based designer platform Figma, citing “no clear path forward” to antitrust approval in Europe and the United Kingdom. Regulators were concerned about whether Figma's smaller rivals could compete.
Prior to the HubSpot deliberations, Google had avoided major acquisitions. The company's largest transaction in its history, the $12.5 billion acquisition of Motorola Mobility, took place more than a decade ago. The company has kept its deal sizes small and has shown an affinity for acquisitions in advertising, such as DoubleClick and AdMob.
What propelled Google into the big deal was a growing $110 billion cash pile and the need to better deploy capital to generate profits. The company, like its peers, has invested heavily in artificial intelligence, but shareholder returns have lagged other companies in the space, including Microsoft and Metaplatform, in recent months.
William Kovačić, an antitrust professor at George Washington University School of Law, said Google's dominance in online search hurts regulators even in areas where it doesn't compete, such as CRM software.
“If you slam the door on a merger that could allow non-participants or weaker participants to gain a greater foothold in the market, you are withdrawing an important source of potential competition in the market,” Kovacic said. ” he said.
(Reporting by Milan Vin and Anirban Sen in New York; Editing by Greg Romeliotis and Matthew Lewis)
