FTC Reviews Google's Plans For DoubleClick

The Federal Trade Commission has begun a review of Google's planned acquisition of Internet ad company DoubleClick, an FTC spokesperson confirmed on Tuesday.

Google maintains the deal will be approved. "We are confident that upon further review the FTC will conclude that this acquisition poses no risk to competition and should be approved," said Don Harrison, senior corporate counsel for Google, in an e-mailed statement. "Numerous independent analysts and academics have determined after looking at this acquisition that the online advertising industry is a dynamic and evolving space -- as evidenced by a number of recently announced acquisitions -- and that rich competition in this industry will bring more relevant ads to consumers and more choices for advertisers and Web site publishers."

Not an organization to engage in public relations battle without ammunition, Google included in its e-mailed statement a pre-packaged selection of quotes from the aforementioned independent analysts, culled from various news sources. According to Google, analysts from Gartner, Forrester, and Stifel Nicolaus see no reason to deny the deal on anti-trust grounds.

Martin Laetsch, senior director of search strategy at SEMDirector, Inc. and former head of worldwide search at Intel Corp., shares that view. "I don't see any major issues here," he said. "I don't think that the acquisition of DoubleClick will put Google into a monopoly position."

Laetsch notes that while Microsoft and AT&T raised anti-trust concerns when the Google-DoubleClick deal was announced, Microsoft "has significantly jeopardized its position with the acquisition of aQuantive."

Beyond Microsoft's $6 billion purchase of aQuantive, the "number of recently announced acquisitions" Harrison cited includes AOL's purchase of a controlling interest in AdTech AG, WPP's purchase of 24/7 Real Media for $649 million, and Yahoo's $680 million purchase of Right Media.

News of the FTC inquiry comes just over a month after the Electronic Privacy Information Center (EPIC), the Center for Digital Democracy, and U.S. PIRG, a federation of state Public Interest Research Groups, filed a complaint with the FTC to halt the deal until privacy concerns are addressed.

Google and DoubleClick have in the past, according to EPIC's complaint, "injured consumers throughout the United States by invading their privacy; storing information obtained through the retention of users' search terms in ways and for purposes other than those consented to or relied upon by such consumers; causing them to believe, falsely, that their online activities would remain anonymous; and undermining their ability to avail themselves of the privacy protections promised by online companies."

Should the deal go forward, EPIC warns that Google will have "access to more information about the Internet activities of consumers than any other company in the world. Moreover, Google will operate with virtually no legal obligation to ensure the privacy, security, and accuracy of the personal data that it collects. At this time, there is simply no consumer privacy issue more pressing for the Commission to consider than Google's plan to combine the search histories and Web site visit records of Internet users."

Earlier this month, the New York State Consumer Protection Board sent a letter to the FTC recommending that the federal trade agency delay the DoubleClick deal until it has "fully investigated Google's planned use of the data post-merger."

Last week, a European Union privacy agency, the Article 29 Data Protection Working Party, began in inquiry into whether Google adhered to EU data protection rules.

Nicole Wong, Google's deputy general counsel, last month refuted EPIC's claims and asserted in an e-mailed statement that "EPIC utterly fails to identify any practice that does not comply with accepted privacy standards."

At that time, DoubleClick also denied that Google would be able to combine its search data with DoubleClick's Web use profiles. "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," the company said in a public statement.

It's not clear whether privacy concerns will affect the FTC's anti-trust review of the Google-DoubleClick deal. A spokesperson for the FTC said the agency had no additional information to offer at this time.

Laetsch doesn't see privacy concerns having any real impact on the FTC's anti-trust review. Nonetheless, he believes that as personalization becomes more prevalent among online ad companies, privacy is something that needs to be addressed.

The ad industry, Laetsch said, has to balance its needs with those of consumers. "People's entire lives are going to the Internet, which is great," he said. "It's a very powerful tool... but at the same time you're starting to expose a lot of your life, a lot of your business to people who'd use that information to their own needs."