Google parent Alphabet’s contemplated acquisition of marketing software company HubSpot would likely spark opposition from regulators, even though many experts agree it would not curb competition in the customer relationship management (CRM) software sector where HubSpot operates. Consequently, the tech giant faces significant Google’s HubSpot antitrust risks if it pursues the deal.
Competition Landscape Scrutinized
Nearly a dozen antitrust experts and industry analysts have stated that an acquisition by Google would be unlikely to hamper competition in the CRM software market. This is because the sector already has several major players, including Salesforce, Adobe, Microsoft, and Oracle. Additionally, Google does not currently compete in the CRM space, and the deal could potentially make HubSpot a more formidable player, thereby improving offerings and prices for customers.
Regulatory Challenges Anticipated
However, these experts also acknowledge that a Google-HubSpot deal would very likely trigger challenges from U.S. and European antitrust regulators. This stems from the regulators’ growing aversion to technology giants expanding through acquisitions. Furthermore, Google would need to be prepared to argue the merits of the deal in a lengthy court battle and convince HubSpot to do the same.
Existing Antitrust Scrutiny on Google
Google is already facing several antitrust challenges, including lawsuits from the U.S. Department of Justice. These lawsuits accuse the company of abusing its position as an online search leader and monopolizing the digital advertising market. Moreover, the regulatory terrain for Google is also hostile in Europe, where it is among the tech firms probed by the European Union for potential breaches of the new Digital Markets Act.
Cash Pile Drives Mega Deal Pursuit
Despite the intense antitrust scrutiny, Google’s HubSpot antitrust risks are outweighed by the company’s swelling cash pile of $110 billion and the need to better deploy capital to generate returns. While investing heavily in artificial intelligence, Google’s shareholder returns have lagged behind other tech giants like Microsoft and Meta Platforms. Consequently, these factors have pushed the company toward considering a mega deal like HubSpot.
As Google weighs this potential acquisition, it faces the prospect of a new antitrust battle with regulators, even as analysts argue the deal may not significantly impact competition in the CRM software market. The company’s Google’s HubSpot antitrust risks loom large, and it will need to navigate these challenges carefully if it decides to pursue the deal.
