EU Privacy Fears Threaten Waze Deal

Google reported to be set to acquire Israeli navigation startup Waze; The purchase, however, would likely require approvals by overseas regulators.

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Recent disclosures about Google’s alleged involvement in the U.S. government’s PRISM surveillance program could threaten to sideline the Internet giant’s billion dollar-plus buyout of Israeli navigation startup Waze, due to European regulators’ concerns over privacy issues.

TheMarker has learned that a European regulatory agency is demanding guarantees that user information held by Waze won’t be exploited. Agencies are also considering making the deal contingent on a formal undertaking by U.S. authorities to honor the request.

Allegations are currently proliferating about the U.S. National Security Agency’s PRISM program, including the charge that it involves the massive harvesting of private communications, primarily between non-Americans, via email accounts, Internet chats and other services provided by Google and other companies.

European regulators are apparently worried that data concerning European Waze users will be shared with Google, thereby becoming accessible to the NSA. PRISM involves an ongoing, massive collection of information.

The concern by European regulators is over the use of real-time information showing the location of people who use the Waze application to find their way around, or who are identified when logging into social media like Facebook and Twitter.

The main worry in Europe, according to information obtained by TheMarker, is that the use of Waze data by the PRISM program won’t comply with existing treaties between the European Union and the United States on the transfer and sharing of information.

Google was reported over the weekend to be set to acquire Waze after the two companies agreed in principle on most of the terms. The purchase, however, would likely require approvals by overseas regulators.

The U.S. Department of Justice will likely intervene in the matter, as well as the antitrust department of the European Commission, the EU’s executive branch.

But even if the European Commission decides not to get involved, regulatory agencies in countries belonging to the EU could still take action.

According to TheMarker’s source, the Europeans aren’t concerned about the possibility of Google gaining a monopoly for navigation applications, but about an increase in the flow of information to American spy agencies. Demands by regulators for assurances in this area are uncommon, but the issue has been given weight by the PRISM revelations.

The European Parliament could also step in if it determines that existing legislation doesn’t adequately cover emerging issues like Internet privacy.

A driver uses Waze.Credit: Bloomberg

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