Santa, a long-time Ars reader and forum denizen, forwarded us a copy of Google's Christmas wish list for 2007:
- Sign up for 700MHz spectrum bid, terrify rivalsConvince FTC that acquisition of massive advertising firm a good ideaBake buttery shortbread cookiesProfit!!!
Santa was miffed that he'll having nothing to deliver to the Googlers this year now that the FTC has approved the company's pending merger with fellow ad giant DoubleClick (the other three items are already fait accompli, including the cookies). In its announcement today closing the investigation into the merger, the FTC concluded that the deal "is unlikely to substantially lessen competition." Europe may not be so understanding, though.
The FTC vote was 4-1, with the assenting commissioners noting that they did not have the legal authority to block the deal based on privacy concerns; antitrust considerations alone were their remit. The FTC concluded that competition in the online advertising market was vigorous and "will likely increase" in the wake of the merger.
Clearly knowing that this would be a controversial decision, the FTC decided to release a voluntary set of "behavioral advertising privacy principles" (PDF)this morning as well. While the Commission won't do anything to halt the Google/DoubleClick merger, it does expect the combined company (and all others in the behavioral advertising space) to abide by a set of general principles.
Those principles suggest that any website collecting behavioral data for advertising purposes should "provide a clear, consumer-friendly, and prominent statement that data is being collected to provide ads targeted to the consumer." Consumers should also have the right to decide if they want this to happen.
In a lengthy dissenting statement, FTC Commissioner Pamela Jones Harbour accepted that the merger could create "some efficiencies." But she worries that it has "greater potential to harm competition, and it also threatens privacy. By closing its investigation without imposing any conditions or other safeguards, the Commission is asking consumers to bear too much of the risk of both types of harm."
The decision is certain to generate controversy, especially in the light of FTC Chairman Deborah Platt Majoras' decision not to recuse herself in the case after it was alleged that her husband, an antitrust lawyer at a prominent DC law firm, was helping to represent DoubleClick (it turns out that his firm represents them only in Europe). Fellow Commissioner William Kovacic also decided not to recuse himself (his wife works at the same law firm).
Under a European microscope
Europe has yet to weigh in on the deal, though, and seems far more likely than the US to impose significant restrictions on the merger. Neelie Kroes, the EU's Competition Commissioner, came under more pressure this week to block the deal when BEUC, a European consumers' organization, sent a letter to her office.
That letter made the now-familiar point that a combined Google/DoubleClick would have tremendous control over both search advertising and non-search ads. It also claimed that the merger could "push up prices for advertisers" and that after the merger, "there will be no real alternative to the combined entity for advertisers and web publishers."
And, of course, the new company would be a "data collection colossus."
The EU is already conducting a thorough look at the deal after preliminary investigation turned up serious competition concerns. That review will be completed by early April, at which time we'll find out if Europe's more aggressive approach to antitrust regulation will throw up any serious roadblocks.