Google-DoubleClick Deal Draws Attention
Tuesday, May 29, 2007; 5:03 PM
WASHINGTON -- The Federal Trade Commission will likely consider the privacy issues raised by Google Inc.'s proposed $3.1 billion acquisition of DoubleClick Inc. as part of its antitrust review of the transaction, analysts said Tuesday.
Antitrust reviews generally focus on monopoly concerns, such as whether the combined company will be able to raise prices without fear of competition. But there is precedent for them to address privacy worries, analysts said.
Ari Schwartz, deputy director of the Center for Democracy & Technology, a nonprofit advocacy group, said "the FTC has looked at consumer protection concerns in the context of a merger," citing the 2001 combination of AOL and Time Warner. In that deal, regulators focused on opening Time Warner's cable systems to competing broadband Internet providers, among other conditions.
Soon after Google announced its plan April 13 to acquire DoubleClick, several consumer advocacy groups, led by the Electronic Privacy Information Center, urged the FTC to investigate the privacy implications of the transaction. The groups said in their April 20 complaint that the two companies, when combined, would have access to an unprecedented amount of data on consumers' Web usage and Internet search habits.
The FTC should block the acquisition unless Google publicly commits to improving its privacy policies, the groups said last month. The Center for Digital Democracy and the U.S. Public Interest Research Group joined EPIC in its complaint.
Adam Kovacevich, a Google spokesman, confirmed Tuesday that the FTC is conducting an antitrust review of the deal.
The FTC has also asked Mountain View, Calif.-based Google for additional information on the deal in a so-called "second request," Kovacevich said. Second requests are common in larger, complex transactions and could mean the review will last for several months.
Marc Rotenberg, executive director of EPIC, said privacy concerns are almost unavoidable given the nature of the online advertising business, which involves the collection and use of personal information.
New York-based DoubleClick helps its customers place and track online advertising, including search ads, which Google _ more than its nearest search competitors Yahoo Inc. and Microsoft Corp. _ has turned into an extremely lucrative business.
DoubleClick had been the target of a fierce bidding war between Microsoft and Google. Though Google commands the bulk of the online advertising search market, the addition of DoubleClick's technology and client network would further its efforts to branch out beyond its core ad offerings.
Don Harrison, the senior corporate counsel for Google, said in a statement Monday that the acquisition "poses no risk to competition and should be approved."
Regarding privacy concerns, Kovacevich said, "User, advertiser and publisher trust is paramount to the success of our business and to the success of the acquisition. Protecting user privacy and making people comfortable with our privacy practices are important elements of that trust."
Earlier this month, Google Chairman Eric Schmidt predicted the company would clear all the necessary regulatory hurdles to complete the acquisition by the end of this year.
A spokesman for the FTC said the agency doesn't comment on pending investigations.
Google's shares rose $3.59 to $487.11 Tuesday.
Associated Press Writer Josh Dubow contributed to this story from San Francisco.