EU gives green light to Google/DoubleClick merger[de] 

With Brussels giving the green light, Google and DoubleClick can now merge without any further obstacle, creating a new Internet giant with a focus on online searches and Web advertising.

Google, mostly known as the global leader in search engines, also has a stake in the online advertisement intermediation market. This means that, through its network AdSense, the Californian company helps publishers and advertisers to trade advertising space on the Internet.

For its part, DoubleClick is the leader in providing ad-serving technology. Its software allows adverts to be placed on the most relevant sites, pages and positions.

The Commission concluded that the two markets which the merger mainly concerns - online advertising intermediation and ad serving - would not be affected.

Indeed, DoubleClick is not at the moment a significant actor in the intermediation market, according to the Commission's analysis. Therefore its acquisition will not deprive the market of an important competitor.

At the same time, the Commission concludes that Google is not likely to use its new power on the ad serving market to hamper competition "mainly because such strategies would be unlikely to be profitable".

As already anticipated by competition officials, Brussels has no competencies in judging a merger on privacy grounds (see EurActiv 14/01/08). Therefore the concerns raised by several actors about the potential risks to personal data protection were not taken into consideration by this decision. The consequences of the merger of two of the biggest online databases will instead have to be studied at national level.

Meanwhile, the Article 29 Working Group, which brings togheter the 27 authorities charged of protecting privacy at national level, will issue a recommendation on the use of private data by search engines next April. People familiar with the subject say that companies are likely to be asked to reduce the time they keep personal information - a measure already announced by Google which, at the moment, is able to store IP addresses and other online private data for years (see EurActiv 07/02/08).

"The Commission's in-depth investigation concluded that the transaction would be unlikely to have harmful effects on consumers, either in ad serving or in intermediation in online advertising markets," reads the press release issued on 11 March. "The Commission has therefore concluded that the transaction would not significantly impede effective competition within the European Economic Area or a significant part of it," it added.

Eric Schmidt, Google's Chairman and Chief Executive Officer, said : "We are thrilled that our acquisition of DoubleClick has closed. With DoubleClick, Google now has the leading display ad platform, which will enable us to rapidly bring to market advances in technology and infrastructure." "This will dramatically improve the effectiveness, measurability and performance of digital media for publishers, advertisers and agencies, while improving the relevance of advertising for users," he added.

But Monique Goyens, Director General of BEUC, the European Consumer Association, commented: "We are disappointed that the Commission has not taken more account of the data protection and privacy issues that are crucial for Internet users". "We hope that from now on the new Google/DoubleClick entity will rigorously follow European legislation. Moreover, given its position, Google has a duty to set an example to avoid a 'race to the bottom' of consumers' privacy rights on the web," she added.

Jonathan Zuck, President of the Association for Competitive Technology (ACT), believes the merger will "undoubtedly change the competitive landscape of our industry and fuel the evolution of internet advertising".  "It demonstrates both the dynamism of our industry and the need to give companies the flexibility necessary to adapt, compete, and meet the needs of consumers," he said.

But members of the European Parliament were also concerned about the risks to personal data breaches. Dutch MEP Sophie In 't Veld (ALDE) said: "The collection and use of personal data have become a valuable commodity and big business. Information about customers and their behaviour and preferences is essential for the competitive edge of many companies. Protection of personal data and competition policy are therefore closely linked in the Google/DoubleClick merger. The Commission should not overlook the connection". 

MEP Britta Thomsen, a Danish member of the Socialist Group in the European Parliament, agreed: "I am deeply troubled that the Commission has not taken the privacy of consumers into account. Such mergers could jeopardise the independence of the internet if unchecked by regulators."