EC to investigate Google-DoubleClick deal

Google disappointed, says it wants to avoid more delays

The European Commission today said it would open an investigation into Google Inc.'s proposed $3.1 billion acquisition of online advertising company DoubleClick Inc.

The commission, which said it was notified of the proposed acquisition on Sept. 21, is concerned about the effects the deal would have on competition in online advertising in Europe.

The commission said it has 90 working days, or until April 2, to make a final decision on whether the proposed transaction would significantly impede effective competition, adding that its decision to launch an investigation does not necessarily mean it will give the deal a thumbs-down.

"The commission will, in particular, investigate whether, without this transaction, DoubleClick would have grown into an effective competitor of Google in the market for online ad intermediation," according to the statement. "It will also investigate whether the merger, which combines the leading providers of ... online advertising space and intermediation services and ... ad serving technology, could lead to anti-competitive restrictions for competitors operating in these markets and thus harm consumers."

Mountain View, Calif.-based Google said it was disappointed by the EC's decision to extend its review of the acquisition.

"We will continue to work with the commission to demonstrate how our proposed acquisition will benefit publishers, advertisers and consumers," said Eric Schmidt, Google's chairman and CEO, in a statement e-mailed to Computerworld. "We seek to avoid further delays that might put us at a disadvantage in competing fully against Microsoft, Yahoo, AOL and others whose acquisitions in the highly competitive online advertising market have already been approved."

Last week, the Republican members of a U.S. House of Representatives subcommittee called for a public hearing to delve into the data privacy issues of the acquisition.

Meanwhile, the Australian Competition and Consumer Commission said at the end of October that it will not stand in the way of the acquisition.

In addition, Google confirmed last spring that the Federal Trade Commission had begun investigating the DoubleClick deal after receiving a complaint filed by the Electronic Privacy Information Center, the Center for Digital Democracy and the U.S. Public Interest Research Group. The advocacy groups have voiced concerns about how Google will handle cookies and other data that could be used to identify Internet users.

"Today's announcement... underscores that the EC recognizes the serious consequences of the proposed Google takeover of DoubleClick," said Jeff Chester, executive director, Center for Digital Democracy, one of the three U.S. nonprofit groups that have petitioned the FTC to oppose the merger. "If we are to have a more democratic and diverse digital marketplace of ideas and commerce, there must be meaningful competition and consumer protection in the online ad sector. This means Google should be prohibited from buying DoubleClick."

If that doesn't happen, safeguards must be imposed that limit Google's ability to leverage New York-based DoubleClick's database of consumer information, Chester said. In addition, he said consumers need to be assured that they won't be unfairly treated in terms of pricing and choice when buying online, and advertisers will need protections to ensure that online marketing remains both affordable and competitive, especially when using Google.

Copyright © 2007 IDG Communications, Inc.

It’s time to break the ChatGPT habit
Shop Tech Products at Amazon