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The Social Science Research Network (SSRN) released an antitrust analysis of the proposed Google and DoubleClick, and suggested the deal would harm DoubleClick's display ad clients.

Study: Google Would Raise DoubleClick Prices

A Senate Judiciary subcommittee hearing on the Google and DoubleClick merger takes place later today. SSRN fanned the flames of antitrust controversy by publishing its study ahead of the hearing.

Robert W. Hahn, AEI-Brookings Joint Center for Regulatory Studies, and Hal Singer, Criterion Economics, found the arguments in favor of the merger don't hold up under scrutiny. One part of their paper considered the impact of all the consumer behavior data Google would receive from DoubleClick in the acquisition (spacing added for clarity):

If consumer data generates increasing returns to scale, as some academics have asserted, Google would extend their lead in search ads and possibly also their new position in graphic ads.

Google’s acquisition of more data would also increase the barrier to entry faced by new entrants, as well as putting current competitors at an even greater competitive disadvantage.

To the extent that Google’s rivals are impaired in their ability to compete effectively, the price of online advertising could increase further.

The authors also believe that extending the AdSense Network to DoubleClick advertisers will include extending Google’s policies on third-party access to performance metrics to those same advertisers.

Citing Google’s Alex Kinnier, who said, "Historically, we've not allowed third parties to serve into Google's AdSense network, which has made it hard for advertisers to get performance metrics," the authors provided another reason why the deal would be anti-competitive:

A combined firm’s control over performance information would leave advertisers without the information necessary to judge the effectiveness of Google products vis-à-vis possible substitutes, and would create another barrier to substituting away from Google or DoubleClick products.

Ultimately, the authors believe DoubleClick customers consider Google to be the "next-best alternative" for online advertising, based on survey evidence.

"The implication of such a finding is that a combined Google-DoubleClick would likely have an incentive to increase the price of DoubleClick’s offering relative to a stand-alone DoubleClick, thereby harming online advertisers," they concluded.