A few months ago, Zoom proposed a $14.7 billion deal to acquire Five9, a leading cloud data center software provider headquartered in the US. The deal was Zoom’s move to penetrate into the contact center as a service market.
However, now the Zoom-Five9 deal has been put to a halt, and currently, the government committee is investigating potential national security risks.
Last month, the Department of Justice sent a letter to the Federal Communications Commission (FCC) to halt the FCC’s review of the Zoom-Five9 deal till a telecommunications security committee looks into the matter to assess whether it possesses any national security risks.
FCC’s function is to review if the deals (like the Zoom and Five9 deal) can be approved. And, at the same time, the telecommunication security committee’s function is to review possible foreign threats in the telecommunications sector.
David Plotinsky, the DOJ foreign investment review acting chief in the letter to FCC wrote that the U.S Department of Justice considers that there can be a possible risk with the foreign involvement (that includes foreign relationship and ownership) linked to the application. Hence, the committee’s review is of utmost importance and essential to assess and make an ideal recommendation as to how the Commission should review the application.
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