FTC OKs Google-DoubleClick Merger

The Federal Trade Commission gave Google a Christmas present and approved its $3.1 billion acquisition of DoubleClick

Dec. 21, 2007 02:15 PM

The Federal Trade Commission this morning gave Google a Christmas present and approved its controversial $3.1 billion acquisition of DoubleClick over the objections of competitors like Microsoft, Yahoo and AT&T – and the massed privacy front.

The 4-to-1 vote came after the head of the Federal Trade Commission, Deborah Platt Majoras, refused to bow to pressure from the Electronic Privacy Center (EPC) and the Center for Digital Democracy (CDD) and recuse herself from the agency’s review of the deal.

That review centered on the acquisition’s antitrust implications. Privacy concerns were not part of the decision. The FTC figures the deal is “unlikely to substantially lessen competition.”

The dissenting voice belonged to commissioner Pamela Jones Harbour who said, “If the Commission closes its investigation at this time, without imposing any conditions on the merger, neither the competition nor the privacy interests of consumers will have been adequately addressed.”

Now all that stands in Google’s way is the European Commission, which has embarked on an extended investigation of the planned acquisition that could go on until April 2, which would be a year after the deal was first announced.

It has already been rubberstamped by the Australian authorities and one of the Brazilian regulators.

European Union legislators, like their American counterparts in the U.S. Senate did before them, are supposed to hold a hearing next month on the privacy implications of the acquisition, according to the AP.

Theoretically the lawmakers could press their regulatory counterparts to take privacy issues into consideration, but it might not matter and could turn into a political hot potato for them.

The EU hearing is supposed to be on either January 21 or January 31.

Europe’s top consumer lobby BEUC has already decided that a Google-DoubleClick merger would be bad for consumers because it would be intrusive in its tracking and profiling and sent the EC a letter to that effect this week.

The BEUC also claimed that GoogleClick would be a monopoly controlling both search and non-search ads capable of passing on higher ad rates to consumers.

Meanwhile, back across the pond US-based privacy groups, convinced that the privacy specter was mistakenly given short shrift by the regulators, complained last week that Majoras’ husband John Majoras, an antitrust lawyer, is a partner in Jones Day, a law firm representing DoubleClick in its quest to get approval for its acquisition by Google.

After consulting the FTC’s ethics officer, Majoras said last Friday that Jones Day is only representing DoubleClick before the European Commission – not before the FTC as alleged – and since her husband – who says he’s not involved in the case – is not an equity partner in Jones Day she has no financial interest in the decision and so meets the agency’s threshold of objectivity.

Another FTC commissioner, William Kovacic, has a wife who also works for Jones Day and he voted too.

The groups say Majoras is required to step aside and threatened to sue. They said a web page that Jones Day deleted used to say it was representing DoubleClick before the FTC.

Meantime, the EPC and CDD have gone off to file a Freedom of Information Act request with the FTC for the records concerning the relationship between Jones Day and DoubleClick.

At press time the EPC and CDD were still working on their reactions.

Responding to the FTC decision, Google put out a statement from its CEO Eric Schmidt saying, “The FTC’s strong support send a clear message: this acquisition poses no risk to competition and will benefit consumers. We hope that the European Commission will soon reach the same conclusion, and we are confident that this deal will deliver more relevant ads for consumers, more choices for advertisers, and more opportunities for web site publishers.”

Google’s statement allowed that privacy matters played no role in the FTC’s review and said, “For us, privacy does not begin or end with our purchase of DoubleClick. We have been protecting our users’ privacy since our inception, and will continue to innovate in how we safeguard their information and maintain their trust.”

Although the FTC by its own admission ignored the privacy issues implicit in GoogleClick, it also proposed a surprise set of behavioral marketing principles for online advertising meant to create (snort) self-regulation.

About Maureen O'Gara
Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara