Google Must Tread Lightly After Microsoft Court Decision

 
 
By Clint Boulton  |  Posted 2007-09-17 Email Print this article Print
 
 
 
 
 
 
 

By denying Microsoft's antitrust appeal and upholding the European Union's $613 million fine against the software company, Europe's Court of First Instance is sending a resounding message to companies it thinks are getting too big for their britches and don't have the consumers' best interests at heart.

The decision provides all the more reason for Google to be extremely careful going forward. As the overwhelming leader in the top-line search market, Google is already on many regulators' watch lists as a potential monopolist.

Google's $3.1 billion bid to buy DoubleClick, which would give them an even more imposing share of the search sector, doesn't help this position.

But size and the will to own as much of the search land grab as possible aren't the only things that put Google on the radars of the EU and other regulatory bodies.

In addition to fending off copyright infringement suits for publishing news organizations' content, the company is under tremendous pressure for the amount of personally identifiable information (PII) it culls in the search log data it stores for targeted advertising opportunities. Several privacy groups are unsettled by the notion that the search vendor is peeping on consumers' searches.

This is a big reason why Google's appearance Friday at an UNESCO meeting in France to support the APEC privacy framework was a smart foot forward.

Rest assured, the EU is aware of Google's growing power, as are the U.S. Federal Trade Commission and Congress. While the U.S. has historically been loathe to shoot down deals due to privacy concerns, Europe's major consumer group BEUC said it feared Google's takeover of DoubleClick would damage European Union privacy rights.

What this means is that between the United States and the EU, there is a healthy opposition to Google adding DoubleClick to its arsenal. I don't expect Google to have as much a problem in the United States. Moreover, traditionally, when the United States blesses a merger the EU follows suit.

But even if the U.S. Congress and FTC allow Google to pass go and collect DoubleClick, the EU, emboldened by its thwarting of Microsoft, may not cave so easily. The EU may smell the blood of a suspected monopolist and go in for the kill.

Because of the court's final position on the Microsoft antitrust case, Google needs to be ready to defend its deal for DoubleClick.

At any rate, keep a close eye on the EU's position regarding the DoubleClick deal: the EU's blessing or opposition to the buy will tell us much about whether or not it suspects Google of being a monopolist and could greatly affect Google's moves going forward. 

 
 
 
 
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