It may have come too late to save Microsoft from an unnecessary $6 billion purchase, but the US Federal Trade Commission (FTC) announced this morning that it will investigate Google's purchase of DoubleClick. Google announced the $3.1 billion deal in April, prompting Microsoft and other online competitors to call for a federal antitrust investigation. Subsequently, Microsoft announced a $6 billion purchase of aQuantive as a defensive measure against the Google/DoubleClick online advertising monopoly.
While the investigation was widely expected and perhaps even a bit overdue, Google maintained its position that the DoubleClick purchase was entirely problem-free. "Numerous independent analysts and academics have determined after looking at this acquisition that the online advertising industry is a dynamic and evolving space--as evidenced by a number of recently announced acquisitions--and that rich competition in this industry will bring more relevant ads to consumers and more choices for advertisers and website publishers," a Google spokesperson said Monday.
Google turned over information about its DoubleClick deal to federal regulators after announcing the purchase. Now, it will need to submit more detailed information to the FTC. Should the organization find anything troubling, it will enter a second, more serious phase of investigation, which could result in the government blocking the purchase.
Ironically, Google points to Microsoft's $6 billion aQuantive deal and a similar purchase made by Yahoo! as evidence that the DoubleClick purchase is competitive. However, neither of those deals would have been made had Google not purchased DoubleClick. One might argue that they prove the opposite of what Google is arguing and that the combination of Google/DoubleClick is indeed anti-competitive.
Privacy experts have also warned that giving the dominant online company, Google, control of even more information about users is also a threat to privacy. "We think it's very important that the FTC is taking a look at the Google-DoubleClick deal," said the Electronic Privacy Information Center's Marc Rotenberg, noting that it is the FTC that is in charge of monitoring online privacy issues in the US. Meanwhile, European Union (EU) regulators are also beginning to ask questions about the privacy implications of this purchase.