What European Consumer Advocates Are Saying About Google/DoubleClick

As the FTC finally gives the green light to Google’s proposed acquisition of DoubleClick, all eyes are now on Europe’s investigation of the deal.

Following its initial warnings issued in late June, consumer group BEUC has once again written to the European competition commissioner Neelie Kroes to express concerns over Google’s proposed $3.1 billion acquisition of Doubleclick.

The BEUC (The European Consumers’ Organisation), which represents 41 pro-consumer groups from across Europe, is arguing that the deal is “not in the interest of European consumers.” The letter cited three main areas of concern: pricing and competition, harm to consumers, and matters of privacy.

Firstly the correspondence suggests that the deal would have a significant negative impact on pricing, and could ultimately impede on publishers’ revenue. It states that Google would be free to raise prices and prevent rival networks from using Doubleclick’s technology, resulting in Web publishers seeing “a reduction in the revenue they receive from Google” and passing these costs on to the consumer.

On competition grounds it argues that the deal would place the entire online advertising market in jeopardy, as the company would “dominate both major pipelines for online advertising.” It goes on to state that “there will be no real alternative to the combined entity for advertisers and web publishers,” which will apparently result in the “significant harm” of European consumers.

Finally the letter expresses concerns over consumer privacy and welfare, stating that the merger would create a structure that would “almost certainly be less respectful of user privacy.” It argues that privacy protection is a competitive differentiator in the ad serving market, and that the merger would eradicate incentives for Google to innovate in the area since competition will have been diminished.

The European Commission is now carrying out a second-phase investigation into competition concerns surrounding the deal. As previously reported by ClickZ news, disapproval from the European Commission is likely to result in a collapse of the entire deal irrespective of the FTC’s decision, since both companies generate significant revenue from within Europe.