EU in Preliminary Probe of Google-DoubleClick Deal
The European Commission will decide by Oct. 26 whether to subject Google’s proposed takeover of DoubleClick to a full-blown antitrust inquiry, a Competition directorate spokeswoman said Tuesday. The $3.1 billion deal has drawn fire from European consumer groups, who say the combined company will monopolize online advertising. And Microsoft, which had also tried to buy DoubleClick, is said to be lobbying hard to stop the sale. Google formally told the commission about the takeover Friday.
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Google announced the agreement in April. In June, the European consumers organization BEUC and members of Altroconsumo, Organizacion de Consumidores y Usuarios and Verbraucherzentrale wrote Competition Commissioner Neelie Kroes that the deal could harm privacy and the provision of online content to consumers. Just as Microsoft dominates office applications through its operating systems, the group said, Google’s acquisition of DoubleClick could leverage the search engine’s keyword search to vertical dominance through DoubleClick’s leadership in online banner and video display advertising.
Google has 90 percent of the German and Spanish search markets, nearly 75 percent of the U.K.’s, and 82 percent of France’s, the consumer groups said. That market power could hurt the diversity of content available by PC, mobile, and interactive TV, they said. After the merger it will be hard to avoid Web sites serving Google- DoubleClick ads, forcing consumers to use those services or opt out of sharing personal data with Google, they said.
Privacy will suffer, consumers said. Merging Google and DoubleClick would let one company obtain and exploit enormous amounts of personal data by building profiles as users search, mining data as they use Web services and applications and tracking them as they surf the Internet, they said. And the new company’s near-monopoly will leave Google with less incentive to compete on points besides price, such as privacy protections, the groups said.
Microsoft, which bid unsuccessfully for DoubleClick, was reported last week to be attacking the merger. Company executives and public-relations firm Burson- Marsteller are trying to get Internet companies, advertisers and regulators to quash the takeover as a threat to online advertizing, The Wall Street Journal said. Burson-Marsteller director Jonathan Dinkeldein e- mailed officials at major U.K. companies asking them to join a new organization, the Initiative for Competitive Online Marketplaces, which will issue statements on Google privacy and other issues in coming weeks, the U.K.’s Register reported. Burson-Marsteller didn’t return requests for comment.
Google asked the Commission to study the proposed deal, a spokesman said. It believes the acquisition will increase competition and benefit consumers and advertisers, and the Federal Trade Commission and the European Commission will approve it, he said.
Google’s situation differs starkly from Microsoft’s, said Paris antitrust attorney Michel Debroux. The EC is studying the Google-DoubleClick merger because above specified thresholds, proposed mergers and acquisitions need antitrust clearance, he said. The mandatory review was spurred by the merger, not, as with Microsoft, launched by the EC on its own or after a complaint, he said.
The Google inquiry will look at the takeover’s likely structure and effects, Debroux said. Review probably began unofficially weeks or months ago, after an informal prenotification process standard in most merger review cases, he said. The formal review takes 25 working days, during which the commission will analyse the market, send questionnaires to clients, competitors, consumers, suppliers and others interested, and examine possible antitrust concerns.
If the EC doesn’t extend the review, Oct. 26 it will clear the deal with or without conditions, or open a “phase two” investigation running 90 or 105 working days, Debroux said.