Consumer groups alarmed by Google online ad merger

The acquisition of the world’s market leader in graphic online ads, DoubleClick, by Google, which dominates the market for text-based internet advertising, has led consumer organisations to ask the European Commission to address privacy concerns when examining the case.

In a letter to Competition Commissioner Neelie Kroes seen by EURACTIV, European consumer organisations led by BEUC have expressed concern that the proposed merger “may have a negative impact on the selection of online content available to consumers and on privacy“. 

The organisations point to the Commission’s 2004 Guidelines on the assessment of horizontal mergers, which say that merger control aims at “preventing mergers that are likely to deprive consumers of the benefits of effective competition”. They go on to state that “according to the information available to us, it seems that, through its acquisition of DoubleClick, Google would monopolise the online advertising business, thereby restricting competition and raising privacy concerns over control of consumer data”. 

Google‘s $3.1 billion acquisition of online-advertising company DoubleClick would bring together the companies dominating the markets for two kinds of online advertising, text- and graphics-based, respectively. It has also come under scrutiny from the United States’ Federal Trade Commission 

The consumer organisations cite the two companies current extremely high market share in their respective advertising sub-markets, concluding that after the merger “it would be practically impossible for users…to avoid all websites serving Google/DoubleClick ads”.

Another concern is that of privacy. In their letter to the commissioner, the organisations wrote: “The combination of Google and DoubleClick entails that, in an unprecedented fashion, a single company will obtain and exploit enormous amounts of personal information about users, by building profiles of users as they engage in searches, mining data from them as they use web services and applications, and observing and tracking them as they visit sites across the web.”

Software company Microsoft has criticised the Google-DoubleClick merger along similar lines to the consumer organisations. Microsoft General-Counsel Brad Smith said:  “This proposed acquisition raises serious competition and privacy concerns in that it gives the Google DoubleClick combination unprecedented control in the delivery of online advertising, and access to a huge amount of consumer information by tracking what customers do online.” 

The Article 29 Working Party of data-protection commissioners from all member states is currently examining data-storage practices by Google and other search engine operators. 

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