Google-DoubleClick Deal Faces Senate Scrutiny

Google will face questions over the state of the online advertising market.

Google plans to tell a Senate committee Sept. 27 that its proposed $3.1 billion acquisition of DoubleClick will not limit competition in the online advertising market. The deal is currently pending FTC (Federal Trade Commission) antitrust review.

The acquisition would combine two of the biggest players in online advertising. Googles text-based AdSense business is based on clickable links, while DoubleClicks technology places targeted banner ads and other display advertising on popular online sites.

According to Google Chief Legal Counsel David Drummonds prepared testimony, "Our acquisition of DoubleClick does not foreclose other companies from competing in the online advertising space. Rather, the transaction is just one of several that underscore the strong competition."

Drummond points to Microsofts $6 billion acquisition of online advertising firm aQuantive, which already has received the FTCs blessing, Yahoos deal to buy Right Media and AOLs purchase of AdTech and Tacoda as proof of a vibrant online advertising business.

"Each of the acquisitions following our purchase of DoubleClick demonstrates that there are sophisticated, well-financed and competitive companies that believe the online advertising space merits more investment and remains open to competition," Drummond states in his prepared remarks.


Read more here about Googles wireless possibilities.

Drummond even goes so far as to quote Microsoft Senior Vice President Brian McAndrews as recently saying, "I dont think youre going to see two or three big players and then, game over. There will continue to be a broad range of companies."

However, Microsoft, of Redmond, Wash., plans to testify against the acquisition, claiming the deal raises serious concerns about competition, consumer privacy, security and copyright protection. EPIC (Electronic Privacy Information Center) also plans to tell the lawmakers it has privacy concerns with the acquisition.

EPIC, the Center for Digital Democracy and U.S. PIRG (U.S. Public Interest Research Group) filed an April 20 FTC complaint shortly after Google, of Mountain View, Calif., announced the deal, arguing the acquisition will give Google unprecedented ability to "record, analyze, track and profile" the activities of Internet users.

"Googles proposed acquisition of DoubleClick will give one company access to more information about the Internet activities of consumers than any other company in the world," the complaint states. "Moreover, Google will operate with virtually no legal obligation to ensure the privacy, security and accuracy of the personal data that it collects."

Both Google and DoubleClick, of New York City, deny the accusation.

Nicole Wong, Googles deputy general counsel, issued a statement April 20 calling the complaint "unsupported by the facts and the law." Wong said the complaint "utterly fails to identify any practice that does not comply with accepted privacy standards."

In his prepared testimony, Drummond touts a number of recent privacy initiatives by Google, including a finite data-retention policy.

"We were the first leading Internet company to decide to anonymize IP addresses and cookies in our server logs after 18 months," he states. "We are pleased other search engines—including Microsoft, Yahoo and—followed our lead in setting their own data-retention policies."

Google also plans to reduce the lifespan of cookies from 30 years to 24 months, which, according to Drummond, "will be a much shorter lifespan than the cookies of many other companies."

Drummond adds, "We believe deeply in protecting online users privacy, and we have a strong track record of doing so. Privacy is a user interest weve been protecting since our inception."


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