French GPS service Coyote to take Waze to court over “unfair competition”

Dec 16, 2013
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French startup Coyote thinks that Waze (acquired by Google, 2013) has gone a bit too far with the precision of highway radar guns, according to LesEchos. Coyote, which offers a GPS navigation hardware device for your car similar to Garmin or Tom Tom, says that French law prohibits exact precision as to where speed traps are – Coyote today will inform passengers when they are within a certain ‘range’ of speed traps, after the aforementioned law passed in January 2012[fr] preventing speed trap alerting in devices.

“Waze didn’t bother me as long as it was a small startup. but when it got bought by Google and integrated Google Maps, it became part of the advertising strategy of the search engine” – Didier Quillot, CEO of Coyote

At first glance, one might think that Coyote CEO Didier Quillot is upset because his service costs 12€/month and Waze is free (and worth about 10-100x more than Coyote); however, Coyote is certainly correct that Waze is breaking French law. The bigger question is, depending on how long the French government waits to take action, how much impact will this have on Coyote’s business? To date, Quillot says that they’ve seen no significant change in their business – Coyote’s 2013 revenue is upwards of €90 Million – however, is this another example of Google leveraging its advertising business in order to run out competition in secondary markets?

Of course, Waze isn’t exactly a perfect product today. Against the average 10 – 12 minute usage per day on Waze, Coyote sees daily usage upwards of 80 minutes, and, having previously tested both products, it is clear that Coyote is providing a more complete service than Waze.

Knowing French law, I expect that any proceedings would rule in Coyote’s favor – though the suit is ill-timed, given the acquisition by Google earlier this year – however, this is not the first time that Google’s core business has enabled them to offer free services in a market where services are generally paid. To date, Waze doesn’t offer any advertising in their product – a potential hole in Coyote’s suit, if they plan to use Waze’s parent Google as evidence of ‘unfair competition’ – however, it is clear that Waze has applications in Google Maps that would allow Google to enrich its overall product offer, allowing it to write-off Waze as overhead.