Justice Department investigating Zoom’s China ties over Five9 deal

The Department of Justice (DOJ) has opened an investigation into Zoom’s $15 billion deal to buy Five9 over of the videoconferencing giant’s connections to China. 

The DOJ requested the Federal Communications Commission defer action on Zoom’s application to acquire Five9 until Team Telecom, an interagency committee responsible for ensuring U.S. telecommunications security, completes a review, according to The Wall Street Journal.

Five9 is authorized as a carrier connecting domestic and overseas networks, which drew the Team Telecom scrutiny. 

The Justice Department cited “the foreign relationships and ownership” as a potential national security risk in a letter regarding the partnership with Five9, an American customer service company.

As a result, Zoom’s $15 billion deal remains on hold.

“The Five9 acquisition is subject to certain telecom regulatory approvals,” a Zoom spokesperson told The Hill in an emailed statement on Tuesday. “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,” the spokesperson added. 

Zoom’s value soared as the U.S. workforce went remote during the pandemic, but its shares have fallen 20 percent in recent months. The company has responded to previous questions about its ties to China by pointing out that it is based in Silicon Valley and that its China-born chief executive, Eric Yuan, is a U.S. citizen, according to the Journal.