WASHINGTON, DC — After an eight-month investigation into whether Google’s proposed $3.1 billion acquisition of online advertising network DoubleClick would “substantially lower competition” in the marketplace, the U.S. Federal Trade Commission on Thursday voted 4-1 to approve the deal.Three privacy groups beg to differ with the FTC, saying the merger will hurt consumers, even though the FTC also has proposed new consumer privacy principles in order to allay fears about online behavioral tracking. In April The Electronic Privacy Information Center (EPIC), the Center for Digital Democracy (CDD), and the U.S. Public Interest Research Group (US PIRG), submitted to the FTC a petition asking that the deal be blocked unless Google made significant changes to its privacy policy.
Both Google and DoubleClick have received significant media coverage and public scrutiny because of the way they track and store identifiable consumer data.
“[A] majority of the commissioners chose to ignore the privacy implications of the Google-DoubleClick merger and to propose instead the same self-regulatory approach to privacy protection that has repeatedly failed American consumers and could have been put forward whether or not a merger review was also under way,” EPIC Executive Director Marc Rotenberg said in a prepared statement. The deal will have “far-reaching implications for the Internet economy and the privacy rights of American consumers,” he said.
CDD Executive Director Jeff Chester took the FTC to task on his blog, where he called the commission’s action ill-advised because the merger will create an entity “whose new, extended data-collection reach will give it unprecedented access to track our every move throughout the digital landscape.
“Despite the FTC’s claims, privacy is most certainly an antitrust issue,” Chester posted. “A key component of the online market dominance that companies such as Google have achieved is the aggregation and analysis of consumer profiles, including the merger of far-flung data sets and vast data warehouses that only a handful of companies now have at their disposal.”
Though commissioners intended to allay such fears in a statement prepared to announce approval of the Google-DoubleClick deal, they actually may have supported Chester’s argument when they wrote privacy concerns “are not unique to Google and DoubleClick. [They] extend to the entire online advertising marketplace.” Instead, according to the statement, commissioners feel online-advertising competition is likely to increase.
“The markets within the online advertising space continue to quickly evolve, and predicting their future course is not a simple task,” according to the FTC’s statement. “We want to be clear… that we will closely watch these markets and, should Google engage in unlawful tying or other anticompetitive conduct, the commission intends to act quickly.”
However, EPIC and the CDD are concerned about the FTC’s ability to act independently of the will of Chairman Deborah Platt Majoras, whose husband is a lawyer at the law firm representing DoubleClick in the merger. In December, the privacy watchdogs filed a complaint asking Majoras to remove herself from the Google-DoubleClick review process because of a potential conflict of interest. Majoras refused, leading Rotenberg to call for an investigation of the chairman. EPIC, CDD and US PIRG may file a legal challenge to the deal, according to Chester.
Even though the merger has passed FTC muster, it still has to clear hurdles before the European Commission. On Thursday, four European consumer groups urged the EC to disapprove the merger until privacy concerns have been addressed.
“Consumers’ privacy could be at risk; it is crucial that the commission integrates privacy concerns into the Google-DoubleClick merger review process,” Monique Goyens, director general of Pan-European consumer group BEUC, said in a statement.
The EC’s competition department has until April 2nd to approve the deal, approve it pending stipulated changes, or block it outright.
