Long Inquiry Road Ahead For Google-DoubleClick

A U.S. House subcommittee plans an additional inquiry into the proposed $3.1
billion merger between Google and DoubleClick. The deal is already under
review at the Federal Trade Commission (FTC).

In a letter this week to FTC Chairman Deborah Platt Majoras, Rep. Bobby Rush
(D-Ill.) said there is “widespread concern” about the deal.

“Concerns have focused not only on the implications for competition — in
online advertising and other possibly affected markets — but also on the
potentially enormous impact on consumer privacy,” Rush wrote.

The merger would combine two of the biggest players in online advertising.
Although Google and privately held DoubleClick deal in online advertising,
their approaches differ. Google’s AdSense business is algorithm-driven and
based on clickable links, while DoubleClick places targeted banner ads on
popular sites.

At a public policy forum in Washington on Wednesday, David Evans of the
private analyst firm LECG, estimated the merger would result in Google and
DoubleClick commanding 78 percent of publishers’ advertising tools and 45
percent of advertising options for advertisers. Evans has also done work for
Microsoft on the deal.

After Google announced the deal in April,
consumer and public policy groups like the Electronic Privacy Information
Center (EPIC), the Center for Digital Democracy and the U.S. Public Interest
Research Group (U.S. PIRG) also raised privacy concerns.

They want the FTC to force 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, they asked the FTC to
require Google to publicly present a privacy plan to comply with government
and industry standards as a condition of the deal.

“Consumer groups in the United States and Europe, as well as the European
Commission’s Article 29 Data Protection Working Party, have expressed growing
alarm over the implications for consumer privacy from the practices of these
companies, especially if they combine,” Rush wrote to Majoras. “I share these

Rush, chairman of the House Subcommittee on Commerce, Trade and Consumer
Protection, said the panel plans to schedule a hearing into the matter after
Congress’ annual August recess.

“We are confident that upon further review the FTC will conclude that this
acquisition is good for both competition and privacy and should be approved,”
Google said in an e-mail statement to internetnews.com.

The Google-DoubleClick deal is one of a flurry of mergers and acquisitions
involving online advertising firms, including Microsoft’s proposed
$6 billion acquisition of
aQuantive and Yahoo’s intent to buy Right
Media for $680 million.

“Numerous independent analysts and academics have determined that the online
advertising industry is a dynamic and evolving space, and that rich
competition in this industry will bring more relevant ads to consumers and
more choices for advertisers and Web site publishers,” Google said.

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