Google-DoubleClick Raise Red Privacy Flags

UPDATED: Online privacy groups filed a complaint with the Federal Trade Commission (FTC) today seeking to block Google’s $3.1 billion bid for online advertising firm DoubleClick unless the world’s largest search engine agrees to greater consumer privacy protections.

The combination of Google and DoubleClick would combine two of the biggest players in online advertising. Google’s AdSense business is algorithm-driven and based on clickable links, while DoubleClick’s DART technology places targeted banners on popular online sites.

The complaint alleges if the deal is allowed to go unchecked, Google will have 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 groups also complain that at least some the data is personally identifiable.

But DoubleClick insisted in a statement, “Any and all information collected by DoubleClick is, and will remain, the property of the company’s clients. Ownership rights, like the other terms of DoubleClick’s client contracts, will be unaffected by any acquisition.”

The privately held 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.”

Nicole Wong, Google’s deputy general counsel, issued a statement calling the complaint “unsupported by the facts and the law.” Wong said the complaint “utterly fails to identify any practice that does not comply with accepted privacy standards.”

The Electronic Privacy Information Center (EPIC), the Center for Digital Democracy and the U.S. Public Interest Research Group (U.S. PIRG) want DoubleClick to remove user-identified cookies and “other persistent pseudonymic” identifiers from all corporate records and databases prior to any transfer to Google.

The groups also want the FTC to require Google to publicly present a plan to comply with government and industry privacy standards as a condition of the deal. In addition, they are seeking to force Google to establish a meaningful data destruction policy and offer consumers “reasonable access” to all personally identifiable data held by the company.

According to the complaint, “Absent injunctive relief [by the FTC]…other companies will be encouraged to collect large volumes of information from consumers in an unfair, disproportionate and deceptive manner.”

When the deal was announced late last week, DoubleClick CEO David Rosenblatt said, “Google is the absolute perfect partner for us. Combining DoubleClick’s cutting edge digital solutions for both media buyers and sellers with Google’s scale and …resources will bring tremendous value to both our employees and clients.”

Google co-founder Sergey Brin added, “Together with DoubleClick, Google will make the Internet more efficient for end users, advertisers and publishers.”

The market was unimpressed with the privacy groups’ FTC complaint. In late afternoon trading, Google shares were up almost $15 to $486.70.

If the deal is approved, it will close by the end of the year.

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