The US Justice Department has begun a review of whether Google’s $32 billion (£23.6bn) planned acquisition of cloud security company Wiz would illegally limit competition, Bloomberg reported.

Officials in the department’s antitrust division have been examining the deal since it was announced in March, the report said.

The probe is in its early stages and could last for several more months before the Justice Department decides whether to try and block the deal or to let it proceed, according to Bloomberg.

‘Humbling’

Such probes typically includes discussions with the merging companies as well as customers and competitors.

The potential for antitrust scrutiny had been a significant factor as the companies negotiating the deal, with Wiz executives wary after Adobe’s attempted $20bn takeover of Figma failed due to antitrust objections in late 2023, according to a previous Reuters report.

The negotiations accelerated after president Donald Trump was sworn into office on the prospect of reduced regulatory oversight, that report said.

In a sign that the companies expected potential challenges, Google reportedly agreed to pay Wiz a fee of more than $3.2bn if the deal does not close.

In July 2024 Wiz rejected an earlier Google bid in favour of a public listing, calling the offer “humbling”.

The deal would be Google’s largest acquisition to date and is intended to boost the capabilities of the firm’s cloud computing unit, which competes with those of Microsoft, Amazon, Oracle and others.

Wiz’s service also works with cloud offerings from those competing companies.

Regulatory pressure

Google’s $5.4bn acquisition of cyber-security firm Mandiant in 2022 also attracted a DOJ review, but was not challenged.

Mandiant was Google’s third-biggest acquisition to date, with the second-largest being the $12.5bn purchase of Motorola Mobility in 2012 to boost Google’s Android unit.

Google sold Motorola Mobility to Lenovo for $2.9bn in January 2014.

The huge deal comes at a time when Google is facing intense federal antitrust pressure, having been found by federal judges to hold illegal monopolies in online search and some advertising technology markets.

The rulings could force it to divest some of its most critical business units, such as its Chrome browser or advertising tools.