Amazon's Twitch buy made possible by Google antitrust concerns

Google had hopes of acquiring Twitch, but got cold feet over the likelihood regulators would raise the antitrust red flag because of YouTube's popularity, according to a report.

Amazon's bid to acquire game-streaming service Twitch for nearly $1 billion was made possible by Google's fears of an antitrust complaint, according to a new report.

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Amazon is spending $970 million to acquire Twitch.

Word is that Google and Twitch had held talks concerning an acquisition, but couldn't agree on a proper breakup fee in the event regulators wouldn't allow the deal to close, Forbes is reporting, citing people who claim to have knowledge of the situation. Google believed that it could face blowback from regulators over its dominance in online video, since its YouTube is already the top online destination for finding video content.

Breakup fees are common attributes of proposed deals in case acquisitions go awry. If the company acquiring the target firm cannot get the deal done, the target company receives a portion of the amount it would have been acquired for. When AT&T decided against acquiring T-Mobile in 2012, for example, it was forced to pay T-Mobile $2 billion for the breakup.

Google declined CNET's request for comment on the report.

Twitch has become an online video juggernaut. The service now has 55 million viewers each month and there are 1.1 million unique broadcasters sharing video with the community. Amazon announced on Monday that it would acquire Twitch for approximately $970 million in cash. It's unlikely that Amazon would face the same regulator resistance as Google, given that its Prime Instant Video service is a paid offering that doesn't have nearly the size and reach of YouTube.

It was believed just one month ago that Google and Twitch were in advanced talks and that they were close to signing a deal. While Twitch has not publicly commented on any other companies that were close to signing the agreement, the company did indicate that it had other interested parties before inking its deal with Amazon.

Although it seems likely that the deal with Amazon will be approved, Twitch will still need to work with the e-commerce giant to get the deal through the regulatory process.

CNET has contacted Amazon and Twitch for comment on the Forbes report. We will update this story when we have more information.

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About the author

Don Reisinger is a technology columnist who has covered everything from HDTVs to computers to Flowbee Haircut Systems. Besides his work with CNET, Don's work has been featured in a variety of other publications including PC World and a host of Ziff-Davis publications.

 

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