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12/13/2007
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Google-DoubleClick Deal Suffers Setbacks

Privacy implications top a ranking congressman's concerns, while potential conflict of interest is on the minds of online rights groups.

Google's plan to acquire Internet advertising company DoubleClick suffered two setbacks on Wednesday.

The Electronic Privacy Information Center and the Center for Digital Democracy, two online rights advocacy groups, filed a motion with the secretary of the Federal Trade Commission asking that FTC chair Deborah Platt Majoras be recused from the ongoing Google-DoubleClick merger review because her husband's law firm, Jones Day, is representing DoubleClick before the European Commission.

Majoras has not yet made a decision about her participation in the Google-DoubleClick review. "The chairman is reviewing the petition with our chief ethics officer," said an FTC spokeswoman. "We found out on Tuesday that Jones Day is representing DoubleClick before the European Commission. Jones Day has not appeared before the Federal Trade Commission in this matter."

DoubleClick said in an e-mailed statement, "Simpson Thacher has been DoubleClick's outside counsel since July of 2005 and was retained to represent it in all aspects of its proposed acquisition by Google, including with respect to United States antitrust matters." The company confirmed that Jones Day represents it in Europe and other non-U.S. jurisdictions.

Also on Wednesday, Rep. Joe Barton, ranking Republican on the House Energy and Commerce Committee, sent a letter to Google seeking answers to 24 questions about Google's privacy practices and policies as they relate to the company's proposed DoubleClick acquisition.

Barton's letter to Google CEO Eric Schmidt describes how his efforts to arrange a visit from two staff members on the House Energy and Commerce Committee have been frustrated. Suggesting that Google could do more to win friends in Washington, the letter complains that, "Your warm initial invitation followed by Google's chilly response to a proposed visit by committee counsels is disconcerting."

A Google spokesman paints a different picture, noting that the committee staffers proposed to visit on short notice, at a time when senior executives were attending the YouTube-hosted Republican debate in Florida.

Barton isn't the only one questioning the privacy implications of the DoubleClick deal. Since Google announced its intention to buy DoubleClick in April, the proposed deal has drawn criticism from privacy groups and scrutiny from legislators in the United States, the European Union, and Australia.

Despite the ongoing privacy questions, Google maintains that acquiring DoubleClick will promote innovation and competition, and that Google is deeply committed to privacy. "We make privacy a priority because our business depends on it," said David Drummond, Google's senior VP of corporate development and chief legal officer, at a congressional hearing in September. "If our users are uncomfortable with how we manage the information they provide to us, they are only one click away from switching to a competitor's services. If you don't believe me, recall that before Google, users clicked on an earlier generation of search engines like Excite, AltaVista, Lycos, and Infoseek -- each extremely popular in its time. User interests effectively regulate our behavior, and user trust is a critical component of our business model."

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