Europe to Investigate Google DoubleClick Deal
On May 28, 2007 I noted that the U.S. Federal Trade Commission (FTC) had begun investigating Google’s $3.1 billion plan to purchase DoubleClick Inc. Today, the Financial Times (FT.com by Nikki Tait in Brussels and Richard Waters in San Francisco) reported that the European Commission announced they were opening an in-depth review of this proposed takeover. The reason given was “that the proposed merger would raise competition concerns in the markets for intermediation and ad-serving in online advertising”. They have until April 2, 2008 to reach a final decision.
The FT.com report pointed out that the FTC was nearing the end of their investigation and could issue a ruling before the end of this year. No significant objections are expected on the US side but that may not be the case in Europe.
The European Commission stated that one focus of their investigation would be whether DoubleClick, without intervention from Google, would be capable of growing into “an effective competitor of Google in the market for online ad intermediation”. In other words, if DoubleClick were to remain autonomous, would they on their own become a strong competitor to Google in the ad serving marketplace.
Google’s response to this investigation is to express dissapointment but a willingness to work with the European Commission to show how the “proposed acquisition will benefit publishers, advertisers and consumers”. Google also noted that they “seek to avoid further delays that might put us at a disadvantage in competing fully with Microsoft, Yahoo, AOL and others whose acquisitions in the highly competitive advertising market have already been approved”.
Whether this European investigation amounts to a mere formality or is an exercise in political posturing to extract special concessions from Google remains to be seen. My concern is that a bureaucratic decision could be reached that serves nobody well on either side.
