FTC Says Google Can Go ahead with DoubleClick Buy

Posted on by Chief Marketer Staff

After more than six months of scrutiny, the Federal Trade Commission has given Google the green light to acquire online ad management firm DoubleClick in a deal valued at $3.1 billion.

The FTC commissioners approved the deal by a vote of 4 to 1. The purchase must still win approval of the European Commission, which has said it will investigate its impact on both competition in Web ads and consumer privacy.

Here in the U.S. competitors were quick to warn of the anti-competitive effect of a Google-DoubleClick buyout soon after the search giant announced its intent last April. Both Microsoft and AT&T urged federal regulators to investigate the anti-trust implications of the acquisition. (Later in the year, Microsoft was able to purchase rival ad platform aQuantive for $6 billion without a full-blown FTC investigation.)

And privacy watchdog groups such as the Electronic Privacy Information Center and the Center for Digital Democracy charged that the deal would let Google combine its view into users’ search behavior with DoubleClick’s ability to track traffic on as much as 80% of the Internet’s third-party sites.

But the FTC statement issued yesterday concluded that a Google-DoubleClick deal “is unlikely to substantially lessen competition” in the online ad market. The commission dismissed concerns of Microsoft and others that combining Google’s strong lead in search marketing with DoubleClick’s power in delivering ads to non-Google Web sites would either lead Web publishers and Google search marketers to DoubleClick’s platform or prevent existing users from switching.

After issuing its decision to close the investigation, the commission said it had found no evidence that adding DoubleClick’s data to what Google already tracks about consumers would harm competition in the online ad market.

But the FTC also warned that conditions could change quickly in the evolving Internet ad mark.

“We want to be clear…that we will closely watch these markets and, should Google engage in unlawful tying or other anticompetitive conduct, the commission intends to act quickly,” the statement said.

On the consumer privacy concerns, the FTC said that such issues “are not unique to Google and DoubleClick” but extend throughout the online ad space. And while it takes consumer privacy issues ‘very seriously,” the commission said, those worries don’t figure in an anti-trust investigation.

“Not only does the commission lack legal authority to require conditions to this merger that do not relate to antitrust, regulating the privacy requirements of just one company could itself pose a serious detriment to competition,” the statement said.

Google CEO Eric Schmidt said in a statement that the FTC’s decision sends a “clear message” that the acquisition poses no dangers to competitors or to the public. Last Wednesday, Google pointed to a new online ad deal between Microsoft and entertainment company Viacom as evidence that the market was still vibrant and competitive.

“We hope the European Commission will soon reach the same conclusion,” he said.

The commission is slated to issue its findings on April 2 and has said it will consider the impact of the DoubleClick buy on consumer privacy.

But Jeff Chester, director of the Center for Digital Democracy, charged that the FTC “sidestepped its duty” to protect consumer privacy in media consolidation and said his group and others will push the EC to set tough privacy restrictions on the deal.

CDD and EPIC have filed a request for legal records behind the FTC investigation of the deal, on the grounds that FTC chairman Deborah Platt Majoras refused to recuse herself from the study even though her husband is a partner in a law firm that until recently said it was advising DoubleClick during the proceedings both in the FTC and the EC.

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