An United States government committee that reviews foreign investment in telecom is investigating videoconferencing firm Zoom's USD 14.7 billion deal for cloud call centre company Five9.
In August, a regulatory filing with the Federal Communications Commission, the Justice Department that chairs the committee said that it would look into the deal “to determine whether this application poses a risk to the national security or law enforcement interests of the US.”
The Wall Street Journal first reported the investigation of the deal.
The Justice Department added, “it believes that such risk may be raised by the foreign participation (including the foreign relationships and ownership) associated with the application.”
Though, the Justice Department did not say in its filing what the foreign bond of concern were and spokesperson Wyn Hornbuckle had refused to answer any questions on Tuesday.
Five9 spokesperson Allison Wilson also refused to comment. Zoom Video Communications said in an emailed statement that it had expected getting the vital regulatory approvals and closing the Five9 deal in the first half of 2022.
The videoconferencing company's spokesperson CJ Lin decline to respond to further questions.
The videoconferencing company, Zoom is based in San Jose, California, and says that over half of its employees are in the United States.
Although, it has a “sizable number” of research and development workers in China, which the firm has observed that it has exposed to the government and media scrutiny.
Zoom said in a regulatory filing in late August said that it is cooperating with ongoing probe the by prosecutors in New York City and California, who last summer had sent summons that asked about interactions with the Chinese government among the other things.
In 2020, the company had grab attention for blocking several meetings related to Beijing's 1989 Tiananmen Square crackdown and had temporarily suspended the accounts of three United States or Hong Kong based activists followed by a request frim the Chinese government.
The company said it would not allow any further requests from the Chinese government to impact anyone outside of China.
Tensions in recent years have been rising between Washington and Beijing, with the disputes over trade, technology, cybersecurity and human rights.
The United States government has taken a firmer stance on Chinese investment, with more scrutiny of deals.
The company said that the deal with Five9 will boost its growth and give it access to more clients from the corporate sector.
Zoom Video Communications Inc. went public in early 2019. And, before the pandemic, the firm made a household name with the shift to online school and work.