A U.S. government committee is reviewing Zoom’s agreement to acquire cloud contact center software company Five9 for $14.7 billion on national-security grounds. CNBC reports: According to a letter dated Aug. 27, the Federal Communications Commission was asked to refer the case to the Committee for the Assessment of Foreign Participation in the United States Telecommunications Service Sector. Attorney General Merrick Garland is chair of the committee. Zoom announced the deal with Five9 in July, marking the video-chat company’s first billion-dollar-plus acquisition. Zoom ballooned in value during the pandemic and, with Five9’s technology, is trying to expand into adjacent markets.
Zoom is based in San Jose, California, and founder and CEO Eric Yuan, a native of China, is a U.S. citizen. The company has a significant research and development hub in China, and last year House Speaker Nancy Pelosi of California referred to Zoom as “a Chinese entity” during an MSNBC interview. “USDOJ believes that such risk may be raised by the foreign participation (including the foreign relationships and ownership) associated with the application, and a review by the Committee is necessary to assess and make an appropriate recommendation as to how the Commission should adjudicate this application,” David Plotinsky of the Justice Department wrote in the letter to the FCC. Zoom still expects the acquisition to close in the first half of 2022, a company spokesperson told CNBC in an email. “We have made filings with the various applicable regulatory agencies, and these approval processes are proceeding as expected,” the representative said.
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