Zoom in the crosshairs: acquisition of Five9 suspected of posing security risk

The huge deal signed in July is being reviewed by a U.S. government committee that will decide whether the deal poses a risk to national security. Zoom expects to receive the required regulatory approvals in the first half of 2022 

Zoom in the crosshairs: acquisition of Five9 suspected of posing security risk

Photo: Bigstock

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, according to a report by CNBC. 

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, according to a letter dated August 27. The chair of the committee is Attorney General Merrick Garland.

Zoom announced the deal with Five9 in July, marking the video chat company's first billion-dollar-plus acquisition. Zoom is trying to expand into adjacent markets with Five9's technology.

Zoom is based in San Jose, California, and its founder and CEO Eric Yuan, who was born in China, is an American citizen. The company has a significant research and development center in China, and last year House of Representatives Speaker Nancy Pelosi referred to Zoom as "a Chinese entity" during an MSNBC interview, according to the report.  

In response to the committee's review, Zoom said in a statement that "The Five9 acquisition is subject to certain telecom regulatory approvals. We have made filings with the various applicable regulatory agencies, and these approval processes are proceeding as expected. We continue to anticipate receiving the required regulatory approvals to close the transaction in the first half of 2022."

You might be interested also