Google-Mandiant Deal Poses Test for Antitrust Regulators

The M&A folks at big tech companies apparently are still working, despite regulators’ best efforts to do away with their jobs. Google’s $5.4 billion cash deal to buy cybersecurity firm Mandiant today—confirming The Information’s scoop on Monday about deal talks—demonstrates that big tech companies aren’t going to let antitrust pressure stop them from pursuing acquisitions. The question now is how hard a line the government will take against this purchase.

You can expect the Justice Department, which our antitrust expert Josh Sisco thinks will handle the review, to scrutinize it closely. Google would seem to have a good argument in the deal’s favor. Its Google Cloud unit, which is buying Mandiant, is a distant No. 3 to Microsoft Azure and Amazon Web Services. The cybersecurity industry has a lot of competitors, a Google Cloud executive pointed out to reporters today, which should make the deal less of a problem for regulators. Still, Google is Google, one of the most powerful tech firms in the world. It’s already facing several antitrust lawsuits from the federal government and states attacking its search and advertising businesses. As a veteran antitrust defense attorney told The Information for our report on Monday, “The odds are pretty good” that the government “will try to come up with a theory for why it should block the deal.”