RealTime IT News

EU Approves Google's DoubleClick Buy

Google won unconditional approval from the European Commission on Tuesday to buy Web advertising firm DoubleClick for $3.1 billion, despite objections from rivals and privacy advocates.

The approval after an in-depth investigation by European competition officials follows clearance from U.S. antitrust authorities received late last year.

The European Commission, the European Union's executive arm, said the companies operate in different parts of the online advertising world and their deal was no marriage of competitors.

"Google and DoubleClick were not exerting major competitive constraints on each other's activities and could, therefore, not be considered as competitors at the moment," it said.

Google (NASDAQ: GOOG) has by far the strongest position in Web searching in Europe. That gives it an edge on the simple ads it sells, which appear on its search pages. DoubleClick deals with more complex graphics- and video-based display ads, which show up on many kinds of Web sites.

DoubleClick also handles ad serving, which handles the display of ads on Web sites and uses software to help advertisers target potential customers. At the same time, it helps publishers with blank space on their Web sites to fill them with ads.

The Google-DoubleClick deal drew opposition from rivals such as Microsoft (NASDAQ: MSFT) and Yahoo (NASDAQ: YHOO). The Commission said once Google and DoubleClick combine they would still be unable to marginalize other ad servers, which have become attractive to big technology players.

Last year, Microsoft bought aQuantive for $6 billion, Yahoo bought BlueLithium for $300 million and Time Warner's (NYSE: TWX) AOL unit bought Tacoda for an undisclosed amount.

Privacy advocates complained that the deal would allow Google and DoubleClick to combine their different methods of gathering information about the habits of Web surfers.

One opponent characterized the gathering of information as a form of market power -- the ability of a company to raise prices or damage competitors.

The Commission's statement sought to play down the concerns, saying it was "unlikely" to have harmful effects on consumers, at least in the markets it considered.

But the European Commission and the U.S. Federal Trade Commission said privacy was outside the scope of a competition review. The Commission's statement on Tuesday had nothing to say about privacy.

One privacy advocate, the Center for Digital Democracy in Washington, said the Federal Trade Commission and European Commission must think about the Web in a different way.

"U.S. and European policymakers must reform the antitrust process to reflect the realities of the digital market era, where competition, data collection, and content creation are seamlessly intertwined," it said in a statement.