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Google-DoubleClick Merger Up For FTC Review

The Federal Trade Commission (FTC) plans to investigate any antitrust implications of Google's proposed $3.1 billion acquisition of online advertising firm DoubleClick. The merger would combine two of the biggest players in online advertising.

An FTC spokesman said Monday morning all investigations are non-public, but confirmed the agency was opening a probe into the merger. Sources close to the deal told internetnews.com an FTC review rarely results in blocking a merger.

Although Google and privately held DoubleClick deal in online advertising, their approach differs. Google's AdSense business is algorithm-driven and based on clickable links, while DoubleClick places targeted banner ads on popular sites.

"We are confident that upon further review the FTC will conclude that this acquisition poses no risk to competition and should be approved," Dan Harrison, Google's senior corporate counsel, said in a statement.

After Google announced the deal in April, the search giant filed the required paperwork under the Hart-Scott-Rodino (HSR) Act that merging parties notify the FTC and the Department of Justice (DoJ). The FTC and DoJ then have 30 days to decide if an investigation is warranted and which agency will handle it.

That window closed Friday and the FTC notified Google and DoubleClick it was seeking further information on the merger.

Harrison said in Google's statement that a number independent analysts and academics have looked at the proposed deal and concluded, "The online advertising industry is a dynamic and evolving space."

Harrison also pointed to the flurry of online advertising mergers announced after the Google-DoubleClick deal, including Microsoft's proposed $6 billion acquisition of aQuantive and Yahoo's intent to buy Right Media for $680 million.

"Rich competition in this industry will bring more relevant ads to consumers and more choices for advertisers and Webs ite publishers," Harrison said.

Shortly after the Google-DoubleClick deal was announced, three privacy groups filed a complaint with the FTC, contending the deal would give Google the unprecedented ability to "record, analyze, track and profile" the activities of Internet users, a charge both Google and DoubleClick were quick to deny.

"Google's proposed acquisition of DoubleClick will give one company access to more information about the Internet activities of consumers than any other company in the world," the complaint states. "Moreover, Google will operate with virtually no legal obligation to ensure the privacy, security and accuracy of the personal data that it collects."

The Electronic Privacy Information Center (EPIC), the Center for Digital Democracy and the U.S. Public Interest Research Group (U.S. PIRG) also claim that at least some the data is personally identifiable information.

The privacy groups want DoubleClick to remove user-identified cookies and "other persistent pseudonymic" identifiers from all corporate records and databases prior to any transfer to Google.

In addition, it wants the FTC to require Google to publicly present a privacy plan to comply with government and industry standards as a condition of the deal. It also hopes to force Google to establish a "meaningful" data-destruction policy and offer consumers "reasonable access" to all personally identifiable data held by the company.

In late April, Google said the complaint, "Utterly fails to identify any practice that does not comply with accepted privacy standards." DoubleClick added, "Google would not be able to match its search data to the data collected by DoubleClick, as DoubleClick does not have the right to use its clients' data for such purposes."

Also over the three-day holiday weekend in the U.S., reports surfaced that the European Union (EU) is investigating whether Google's privacy policies conform to European privacy rules. According to the Associated Press, Google will address the EU's concerns by the end of June.