EU Greenlights $32B Google-Wiz Acquisition Following Antitrust Evaluation

The European Commission has approved Google’s $32 billion acquisition of Wiz, a leading cloud security company, citing no significant competition concerns stemming from the transaction. The decision comes amid ongoing scrutiny of cloud infrastructure competition, particularly given Google’s relatively minor foothold in the sector compared to giants like Amazon and Microsoft.

In their ruling, regulators noted the presence of numerous alternative cloud security providers, mitigating risks associated with commercially sensitive data. The approval also followed a favorable review by the U.S. Justice Department in November, signaling alignment between regulatory bodies on this acquisition.

European Commission Executive Vice President Teresa Ribera emphasized that Google ranks behind both Amazon and Microsoft in market share within cloud infrastructure and remains committed to preserving customer choice and the viability of other service providers. Ribera stated that this acquisition “does not raise competition concerns in cloud services or cloud security.”

Despite Google’s significant growth in Infrastructure as a Service (IaaS), increasing its public cloud services revenue by 25% in 2023 to $11.45 billion, it still commands only 8.2% of a $140 billion market, compared to Amazon’s 39% and Microsoft’s 23%. Concerns had been raised by advocacy groups regarding potential anti-competitive effects related to cloud security and overall market dynamics (see: Groups Warn $32B Google-Wiz Deal Threatens Cloud Competition).

Regulatory Findings on Customer Behavior and Competition

The Commission’s investigation highlighted customer feedback indicating that even with tight integration of Wiz’s services into Google’s offerings, switching providers would remain feasible. The functional design of Wiz’s products allows for migration to competing platforms, thus preserving the competitive landscape in cloud security.

A representative from Wiz expressed enthusiasm regarding the Commission’s approval, stating, “We look forward to completing the remaining regulatory reviews and getting to work,” indicating a commitment to enhancing cloud security solutions in partnership with Google.

Furthermore, the Commission expressed confidence that customers utilizing multi-cloud architectures would quickly transition to alternative solutions if Wiz’s services were to falter. This behavior serves as a natural deterrent against potential anti-competitive practices, ensuring that Google must prioritize the operability of Wiz across various cloud environments.

As Google responds to these developments, the message remains clear: enhancing multi-cloud security solutions is essential for providing diverse options to businesses and government entities, as noted in a statement from a Google representative. The completion of the acquisition is anticipated by 2026, indicating an evolving landscape for cloud security offerings.

Information Sensitivity and Competitive Dynamics

The assessment by the Commission also concluded that bundling Wiz too tightly with Google Cloud could provoke backlash from the market, with rival vendors poised to fill any gaps left by inadequate competition. Although advocacy groups have raised alarms regarding potential discriminatory practices, the Commission found no substantial risk of Google gaining an informational edge that would distort competitive dynamics in the cloud security space.

Concerns voiced by civil society groups center on the notion that Google may be able to leverage telemetry and data insights gained through the acquisition to enhance its market position, thereby limiting the operational viability of competing providers. The Commission’s Phase I clearance, affirmed as the result of an extensive investigative process, aims to balance regulatory oversight with the dynamic needs of an evolving digital infrastructure.

Despite the regulatory backing, civil society organizations stress the complexity of the deal, advocating for a thorough examination that transcends initial clearance processes, asserting that the long-term implications are significant and demand closer scrutiny.