Microsoft, others protest Google's DoubleClick deal

Google and DoubleClick merger would leave only a few options for online advertisers

Google's proposed merger with online advertising server DoubleClick would create a giant that would control a huge portion of online advertising and hurt the Internet, opponents of the deal have told US lawmakers.

The merger, proposed in April, would create "extreme market concentration", said Scott Cleland, chairman of Netcompetition.org, an lobby group representing large broadband providers.

The merger would leave online advertisers with "no real competitive choice," he told the Senate Judiciary Committee's Subcommittee on Antitrust, Competition Policy and Consumer Rights.

Microsoft general counsel, Brad Smith, argued that the marriage of Google and DoubleClick would give Google 70 per cent control of the search-based advertising market and 80 per cent of the online display advertising market.

Microsoft is still under court supervision for its own 2002 antitrust settlement with the US government. Yet Smith suggested regulators should reject the Google-DoubleClick merge on antitrust grounds.

"What are the economic consequences of allowing the largest company in online advertising to acquire its most significant competitor?" Smith said. "If Google and DoubleClick are allowed to merge, Google will become the overwhelmingly dominant pipeline for all forms of online advertising."

But David Drummond, Google's chief legal officer, argued that DoubleClick has a different business model to Google.

"We are confident our purchase of DoubleClick does not raise antitrust issues because of one simple fact: Google and DoubleClick do not compete with each other," he said. "DoubleClick does not buy ads, sell ads, or buy or sell advertising space. We sell ads, DoubleClick delivers ads."

Microsoft's estimates of Google and DoubleClick controlling 80 per cent of the display ad market is a "made-up number", Drummond added.

A month after Google announced plans to acquire DoubleClick for US$3.1 billion, Microsoft said it would acquire aQuantive, a digital marketing services agency, for US$6 billion. Yahoo and AOL have also recently announced acquisitions in the online advertising space.

Cleland argued that the Google-DoubleClick deal represented the biggest threat to competition in online advertising. He called the US government's antitrust review "a watershed moment" for Internet competition.

Google's own "uniquely monopolistic" mission statement said it wanted to organise the world's information, Cleland added.

"No other entity currently has such a naked ambition to control or effectively corner the market for any of the world's commodities, let alone all the world's information," he said.

Electronic Privacy Information Center president, Marc Rotenberg, voiced concerns that the merger would hugely affect consumer privacy. The combined company would control a vast database of customer data, Rotenberg said.

Regulators in the US, Canada, Australia and Europe "appear to be in agreement" that there is no merger that poses a more significant threat to online privacy than Google's proposed acquisition of DoubleClick, Rotenberg said.

"This is going to be a real problem for the Internet if it's allowed to go forward."

Google believed "deeply" in protecting online users' privacy, Drummond answered. Google has announced plans to make IP (Internet Protocol) addresses and cookies anonymous and the company is working on several other privacy initiatives, he said.

Senator Orrin Hatch, a Republican, asked Google's Drummond how the company could complain about the lack of broadband providers when its merger could create a dominant Internet advertising provider.

Companies wishing to advertise online had "many, many" choices, Drummond said, while most consumers had the choice of one or two broadband providers.

But Hatch also suggested to Microsoft's Smith that Google could lose advertising market share if a better search engine came along. "Where is the antitrust problem?" he said. "Why not just build a better product?"

The online advertising market was consolidating rapidly, Smith said. Companies wishing to advertise online would soon be left with one to three choices, he predicted.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Grant Gross

IDG News Service
Show Comments

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?