Google to Face Senate over DoubleClick Deal

By Clint Boulton  |  Posted 2007-09-20 Print this article Print


Nothing like a meeting of the Senate to find out which way the wind is blowing on a deal.

The U.S. Senate subcommittee on antitrust competition policy and consumer rights said it will hold a hearing Sept. 27 to look at the $3.1 billion purchase of DoubleClick.

This is a bid that had AT&T, Microsoft and privacy groups everywhere claiming the search vendor will have a monopoly on the online advertising market if the deal is consummated. Those concerns can harp all they want; it's the opinions of the Federal Trade Commission, European Union and Australian authorities currently poring over the deal that matter.

Interestingly, the meeting will come two weeks after Google's privacy evangelist Peter Fleischer called for high-tech firms around the globe to support the APEC Framework.

Some scoffed at Fleischer's overture, arguing that APEC is horribly vague and that Google was simply posturing to look like it was playing nice for the governments and privacy groups that are scrutinizing it for potential anti-competitive practices. Whatever.

I don't know if it's posturing or not. We already know Google is taking this privacy thing very seriously by curbing its data retention policies. The company has been repeatedly hammered for its privacy practices, and that won't stop as long as the company continues to sock away search data on its users.

So how big is the hearing? It's big. Expect Senate subcommittee chairman Herb Kohl (D-Wisconsin) to pepper Google with question after question about how a Google-DoubleClick marriage won't hurt competition. Expect Kohl to force Google to explain why the deal is good for the industry. Expect this post to form the meat of Google's argument.

Google had better sell it, because this hearing could determine the fate of the deal and you can bet that the Senate and the FTC will be on the same track when it comes time to green-light or quash it.

The EU and Australian government will be watching closely and will likely follow the U.S.'  lead in this case. Incidentally, Google said today it filed with the European Union competition regulator  for permission to buy rival DoubleClick, according to a Reuters report.

The EU has set a review deadline of October 26 -- when it could approve the deal, give a two-week extension or open an in-depth, four-month investigation, Reuters said.

But perhaps the Senate is simply posturing with this hearing. Some folks argue there is no real precedent for the U.S. government blocking a vertical merger such as Google-DoubleClick, and that the FTC would have a hard time proving such a deal will hurt consumers, which, of course, is the key issue.

Whatever the case, Google seems confident.

A Google spokesperson told me, "We're looking forward to talking with Congress about how our acquisition of DoubleClick will benefit both competition and privacy, and we are confident that the acquisition will ultimately be approved by the FTC."

Confident or not, it can't be fun to sit in front of the Senate to sell them on a deal in an online advertising business that is evolving almost too fast for most people to grasp it. 

Submit a Comment

Loading Comments...
Manage your Newsletters: Login   Register My Newsletters

Rocket Fuel