Today the Federal Trade Commission announced that Google’s buyout of DoubleClick can proceed. Despite anti-trust and privacy concerns, the FTC ruled 4-1 to give Google the go-ahead to buy the Internet-advertising company for $3.1 billion. (1) The FTC’s report, authored by Chairman Deborah Platt Majoras and Commissioners Jon Leibowitz, William E. Kovacic and J. Thomas Rosch, stated that they have no legal right to block or allow mergers based on privacy issues, as their only purpose is “to identify and remedy transactions that harm competition.” (2) However, their report briefly touched upon the privacy issues of the merger: “The consumer privacy issues presented by ‘behavioral advertising’ are not unique to Google and DoubleClick. To the contrary, these issues extend to the entire online advertising marketplace.” The FTC then suggested that self-regulation is the best way for companies to agree on how to best respect users’ privacy. (3)
In her dissenting opinion, Commissioner Pamela Jones Harbour objected to the merger, stating that excluding privacy from the analyis ignores consumers’ values and preferences about the data that Google and DoubleClick collect from them. She pointed out that although Google and DoubleClick have promised to respect consumers’ privacy, their words are not legally binding. “The merger creates a firm with vast knowledge of consumer preferences, subject to very little accountability,” she wrote. (4) Harbour disputed the belief that most people do not value privacy, arguing that “privacy principles should protect the majority of consumers who do care about their privacy, and who would prefer greater transparency about the use of their personal information.” (4) Furthermore, she questioned the majority’s view that self-regulation is the best approach and argued that a legislative solution should be considered: “Congress ultimately will need to decide whether a market-oriented solution is workable, given the disconnect between the financial incentives of advertisers and publishers and the privacy incentives of some consumers.” (4)
The European Commission, the execitive body of the European Union, has not yet made a decision on whether to approve the deal. Their decision, which will be announced on April 2, could make or break the merger, as it would be difficult for Google and DoubleClick to operate as a single company in one continent but not another.
In my next post, I will describe more specifically the privacy issues that the merger raises…
Sources:
1. Kawamoto, Dawn and Anne Broache. “FTC allows Google-DoubleClick merger to proceed.” CNET News.com. 20 Dec. 2007 <http://www.news.com/FTC-allows-Google-DoubleClick-merger-to-proceed/2100-1024_3-6223631.html>.
2. “Federal Trade Commission closes Google/DoubleClick investigation.” FTC.gov. 20 Dec. 2007 <http://www.ftc.gov/opa/2007/12/googledc.shtm>.
3. “Statement of Federal Trade Commission Concerning Google/DoubleClick.” FTC.gov. 20 Dec. 2007 <http://www.ftc.gov/os/caselist/0710170/071220statement.pdf>.
4. “Dissenting Statement of Commissioner Pamela Jones Harbour.” FTC.gov. 20 Dec. 2007 <http://www.ftc.gov/os/caselist/0710170/071220harbour.pdf>.