EU Hearing Could Influence Google/DoubleClick Decision

Google has accused European parliamentarians and privacy advocates of encouraging the European Commission to consider privacy issues in its investigation of the proposed $3.1 billion DoubleClick acquisition. The European commission has previously stated that it will not take privacy into consideration during its phase two competition investigation of the merger.

Speaking at a European Parliament hearing on “Data Protection on the Internet” in Brussels yesterday, Google’s privacy counsel Peter Fleischer said “People are trying to take a privacy case and shoehorn it into a competition law review.”

The hearing was arranged to discuss the potential privacy implications of Google’s proposed DoubleClick acquisition, as well as wider privacy concerns surrounding Internet data. Privacy advocates and campaigners from numerous organizations were present, expressing concerns surrounding Google’s potential dominance of the Internet advertising industry and the huge amounts of consumer data the company has access to.

The European Commission decided in November to open an in-depth phase two investigation of Google’s proposed DoubleClick buy.

“I can understand that people are trying to peddle this theory in Europe after having lost in the United States,” he continued, in reference to the Federal Trade Commission’s clearance of the deal last month.

Dutch Parliamentarian Sophie in ‘t Veld countered by arguing that issues of privacy and competition were intrinsically linked, and that user data and information represents “market power.”

“The reason you want to have the data is because it gives you a competitive advantage,” she said. “It is business. I don’t think they can be completely disconnected.”

Ms Cornelia Kutterer of the consumer body Bureau Europeen des Unions de Consommateurs supported this view, pointing out that the confidentiality and security of Internet exchanges are not guaranteed, and adding that it is “doubtful” whether targeted advertising broadens consumer choice. She stated that it would be “absurd” for the competition department not to look at privacy in this merger.

FTC commissioner Pamela Harbour, who dissented on the FTC’s clearance of the deal, said her colleagues at the FTC had taken a “traditional approach” to the investigation by discounting questions of privacy in their decision. She added that this attitude did not “capture the interests of all the parties.”

The European commission has vowed privacy issues will not be examined in its investigation of the merger; however, this does not guarantee yesterday’s hearing will have no bearing on the outcome of the review.

Speaking with ClickZ News, Douglas Lahnbourg, competition partner at Heller-Ehrman, questioned the timing of the hearing, in light of the current investigation. “It is highly unusual for the European Parliament to organize hearings with ongoing merger investigations as the principal focus area,” he said.

“The question is the extent to which the Commission will be influenced by the hearing. Certainly, if good competition arguments are raised against the merger one would expect this to influence the investigation.”

Although the European Commission does in theory have the power and jurisdiction to block the merger, in the last six years it has not turned down any US-approved deal involving all US companies.

The final verdict of the European Commission’s second phase investigation is due by April 2.