Is Google’s acquisition of DoubleClick a monopoly in the advertising market? That’s what many have been wondering for a while.
Note: This is an article I wrote that was published elsewhere first. It has been republished here for archival purposes
It seems that CIPPIC (Canadian Internet Policy and Public Interest Clinic) is asking the same question, which will be a important debate topic for the Competition Commissioner in Canada.
The acquisition of DoubleClick is a move that has raised serious questions on a number of fronts. In April, companies including Yahoo, AT&T and Microsoft urged the FTC to look into the acquisition. The FTC received similar complaints (PDF) from EPIC (Electronic Privacy Information Center), CDD (The Center for Digital Democracy), and U.S. PIRG (The U.S. Public Interest Research Group).
The main complaint centered on privacy concerns. Privacy issues with Google are nothing new. Just last month, controversy surrounding the “Google cookie” drew additional privacy concerns, as many felt the cookie’s lifespan was excessive. It was enough to convince Yahoo and Microsoft to shorten the lifespan of their cookies and declare that they are protecting their customers’ privacy.
It seems Google’s $3.1 Billion controversy is another chapter in the PR battle over anti-trust and privacy issues. EPIC complained that “DoubleClick was unlawfully tracking the online activities of Internet users and combining surfing records with detailed personal profiles contained in a national marketing database. EPIC asked the FTC to investigate the practices of the company, to destroy all records wrongfully obtained, to invoke civil penalties, and to enjoin the firm from violating the Federal Trade Commission Act […] DoubleClick has used clear GIFs (web bugs) to track user’s progress within Web sites and collect information about the user.”
Anti-trust concerns were also noted. Scott Cleland, President of Precursor commented, “To equal Google-DoubleClick’s level of market concentration, one single financial services company would have to own:
– The top ~15 Wall Street banks/asset managers;
– 60% of the hedge fund and private equity industries;
– The New York and London Stock Exchanges;
– The two leading providers of financial analytic tools: Bloomberg and Factset;
– Two of the three national providers of credit profiles: Experian and Equifax; and
– ~60% of the Federal Reserve’s and U.S. Census Bureau’s raw market and consumer data.”
Concerns like this were echoed by CIPPIC in their press release (PDF):
“A Google-DoubleClick merger will greatly affect electronic commerce,” notes CIPPIC director Philippa Lawson. “Through the merger, Google-DoubleClick will gain unprecedented market power, with which they can manipulate online advertising prices. Advertisers and web publishers will have no real choice but to choose Google’s advertisement platforms in order to remain visible in the e-commerce market.”
In CIPPIC’s letter to Sheridan Scott, Commissioner of Competition, CIPPIC said (PDF), “A merger between Google and DoubleClick will, in our submission, prevent or substantially lessen competition in these markets by allowing the merged company to combine Google’s keyword search dominance with DoubleClick’s leadership in display advertisement serving and behavioural targeting advertisement products. This combination of capabilities would, in our submission, give Google-DoubleClick clear dominance on the overall market for advertisements provided to third-party websites.”
In a supplementary submission to the FTC, EPIC alleges that, “On June 1, 2007, Google announced that it had acquired Feedburner, a service that ‘allows blog owners and podcasters the ability to manage their RSS feeds and track usage of their subscribers. […] Google also collects information with Blogger and Google Reader concerning what blogs and Web sites a user frequents. […] Google maintains copies of all instant message and email traffic associated with Google users who use Google Talk and Gmail. […] Furthermore, Google maintains user schedule information inputted into Google Calendar on its own servers.'”
Concerns over the acquisition weren’t just tied to North America. In Europe, BEUC (The European Consumers Organization) filed a complaint (PDF) to the European Commissioner, saying “According to the information available to us it seems that, through its acquisition of DoubleClick, Google could monopolize the on-line advertising business, thereby restricting competition and raising privacy concerns over control of consumer data.”
One thing seems certain: many organizations appear ready to fight the merger in the Western hemisphere. A lot of people view Google as anti-privacy and anti-competitive, and Google may have a tough road ahead to convince consumer advocates otherwise.
Drew Wilson on Twitter: @icecube85 and Google+.
