Quantcast

FTC Gives Google, DoubleClick Thumbs Up

CDD blasts approval as an FTC failure

Get the WebProNews Newsletter:
[ Search]

A 4-1 vote by the Federal Trade Commission wraps up its eight-month investigation of antitrust concerns over Google’s purchase of DoubleClick and approves the acquisition.

Google expected the DoubleClick buy to gain approval by the end of 2007. Eric Schmidt and company probably did not think it would happen with only eleven days to go in the year.

But it has, leaving the European Commission’s review and commentary on the deal the next issue pending for the two companies. The FTC said it did not expect the transaction to "substantially lessen competition" in the online advertising market.

Chairman Deborah Platt Majoras and Commissioners Jon Leibowitz, William E. Kovacic and J. Thomas Rosch voted in favor of the pact. Majoras had been pressured to recuse herself from voting, as her husband works for the Jones Day law firm, which is providing DoubleClick’s antitrust counsel in Europe.

Kovacic also revealed he, like Majoras, had a non-equity partner as a spouse at Jones Day. The law firm had touted its relationship with DoubleClick on its website, but when questions arose about Majoras’ possible conflict of interest, Jones Day scrubbed its site of all DoubleClick references.

Though the FTC found that Google likely would not be able to affect market power in third-party ad serving, the Commissioners did say "We want to be clear, however, that we will closely watch these markets and, should Google engage in unlawful tying or other anticompetitive conduct, the Commission intends to act quickly."

Jeff Chester at the Center for Digital Democracy said the FTC "sidestepped its responsibility" in not considering the privacy aspects of Google’s DoubleClick pact.

"By permitting Google to combine the personal details, gleaned from our searches online and YouTube downloads, with the vast repository of information collected by DoubleClick, the FTC has sanctioned the creation of a new digital data colossus," Chester said in a statement.

"The excuse offered by the majority of the commission – that consumer privacy can’t be addressed by current antitrust law – reveals a lack of leadership and determination to protect U.S. Consumers."

"The FTC’s strong support sends a clear message: this acquisition poses no risk to competition and will benefit consumers," Schmidt said in a statement. "We hope that the European Commission will soon reach the same conclusion."

Dissenting FTC Commissioner Pamela Jones Harbour summarized her concerns in a separate statement; hers was the lone vote against the merger:

I dissent because I make alternate predictions about where this market is heading, and the transformative role the combined Google/DoubleClick will play if the proposed acquisition is consummated.

If the Commission closes its investigation at this time, without imposing any conditions on the merger, neither the competition nor the privacy interests of consumers will have been adequately addressed.

Commissioner Jon Leibowitz published a concurring statement, echoing Harbour’s concerns:

(T)he serious vertical competition issues raised by Google’s proposed acquisition of DoubleClick as well as the substantial privacy issues that, though in part brought to light by the deal, clearly transcend it.

Ultimately, reasonable people – and Commissioners – may disagree about whether to approve this merger, but most everyone should agree that consumer privacy needs to be better protected in the online behavioral marketing arena.

With this decision, the FTC has left that protection up to the private sector. Perhaps they feel privacy videos from Google suffice to serve that purpose.

 

FTC Gives Google, DoubleClick Thumbs Up
Comments Off
Top Rated White Papers and Resources

Comments are closed.

  • Join for Access to Our Exclusive Web Tools
  • Sidebar Top
  • Sidebar Middle
  • Sign Up For The Free Newsletter
  • Sidebar Bottom