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  • Parv Jain

Google's Big Move: A New Regulatory Battle Ahead?

Google

Google's parent company, Alphabet, is thinking about buying HubSpot, a company that makes marketing software, and the deal could be worth $34 billion. Some people say this purchase might not stop other companies from competing, but it could still cause problems with the groups that make sure companies play fair.

Last week, Google is still deciding if it wanted to buy HubSpot because it was worried about breaking rules that prevent any one company from controlling too much of the market.


Experts say that Google buying HubSpot, a company that helps businesses manage their customer relationships, probably won't stop other companies from competing. This part of the business world, known as customer relationship management or CRM, already has big names like Salesforce, Adobe, Microsoft, and Oracle. Google doesn't currently work in CRM, but if it buys HubSpot, it could help HubSpot do better by using Google's technology for storing data online. This could lead to better services and prices for people who use these types of software, according to several experts and reports.


Research by Gartner shows that in the CRM marketing software world, HubSpot, which mainly helps smaller businesses, had a 4.9% share of the market in 2022. Bigger companies like Salesforce and Adobe each had 15%.


However, if Google decides to buy HubSpot, experts think this move could face big challenges from regulators in the U.S. and Europe.


These regulators are increasingly cautious about letting big tech companies grow through buying other companies. They say Google and HubSpot would have to prepare for a possible long legal fight to prove that this deal is a good idea. Seth Bloom, who once advised the U.S. Senate on competition issues and now has his firm, thinks regulators might not welcome the deal. Neither Google nor HubSpot has made any comments on this matter.


Google is currently dealing with a couple of big legal issues in the U.S., where it's been accused of not playing fair in the online search and digital advertising markets. The U.S. Department of Justice, which is behind these lawsuits, hasn't commented on these issues yet.


Over in Europe, Google isn't having an easy time either. The European Union is looking into whether Google and other big tech companies are following new rules meant to help people easily switch between online services like social media, web browsers, and app stores. These rules are part of something called the Digital Markets Act.


The European Commission, which is in charge of making sure companies in the EU follow the rules, said it hasn't been told officially about Google's plans to buy HubSpot. But, they pointed out that it's the companies' responsibility to let them know if a big deal like this is happening, especially if it affects people in Europe. The Commission has fined Google before for not competing fairly.


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