Google faces new FTC probe over display ads


Federal officials have monitored firm’s conduct since its acquisition of digital ad company DoubleClick. (KIMIHIRO HOSHINO/AFP/GETTY IMAGES)

Federal investigators have begun probing whether Google is using its increasingly potent position in the online advertising market to undermine competition, an issue officials have monitored since its acquisition of digital ad company DoubleClick in 2008, said people familiar with the inquiry.

The probe — in an exploratory phase, according to these accounts — comes just months after the Federal Trade Commission closed an unrelated investigation of allegations that Google was using its power in the lucrative search business in ways that violated antitrust law.

It remains unclear whether the FTC has concluded that Google violated any law, and some preliminary inquiries end with no action against companies. But this newest phase of federal scrutiny for Google underscores how regulators worldwide are perhaps the most important potential checks on the growth of an ambitious, highly profitable company as it seeks to consolidate its position in existing markets and move into several new ones.

Google spokeswoman Niki Fenwick declined to comment, as did Federal Trade Commission spokesman Peter Kaplan.

The inquiry flows from Google’s purchase of DoubleClick, a major player in the display-ad market, for $3.1 billion, said the people familiar with the FTC inquiries who spoke on the condition of anonymity to discuss matters not yet made public. Bloomberg News first reported Thursday evening on the FTC’s interest in Google’s behavior in the online ad market.

Before approving the DoubleClick acquisition in a 4 to 1 vote, the FTC expressed concern about the possibility that Google could leverage DoubleClick and its existing advertising businesses, such as AdSense, in ways that hurt competition. The commission’s statement at the time singled out the risk of “tying” — a term that describes illegal efforts to require customers to buy more than one of a company’s products.

“Because the evidence did not support the theories of potential competitive harm, there was no basis on which to seek to impose conditions on this merger,” the FTC said in a statement at the time, in 2007. “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.”

Since that statement, made in December 2007, several competitors have left the online ad market, and Google’s share of some segments of the market has grown.

European regulators, meanwhile, are in the final phases of an investigation into Google’s power over the search market and in the early phases of an inquiry into the company’s Android operating system, which has been used on more than 900 million mobile devices worldwide. Canadian regulators also have opened an antitrust investigation of the company, which is based in Mountain View, Calif.

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Craig Timberg is a national technology reporter for The Post.
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