Jeff Chester, executive director of the Center for Digital Democracy, a leading public interest group focused on technology, responded to a recent post on the Federal Trade Commission's ongoing review of Google Inc.'s acquisition of DoubleClick Inc.:
I just want to make clear our message (Center for Digital Democracy) to the FTC and the Congress is that the Google acquisition of DoubleClick must be rejected on competition [antitrust] grounds. (We also have serious concerns about consumer data privacy as well with the proposed merger.) CDD already petitioned the FTC to investigate the growing consolidation in the online ad marketplace in a filing last November (see our Web site, www.democraticmedia.org ). There has been a steady — and alarming — trend of acquisitions and buyouts in the field over the last two or so years. Certainly the developments in the last several months are stunning — anywhere between $12-15B in deals focused on the control of consumer data, primarily for interactive advertising (Google-DoubleClick; Micrsoft-aQuantive; Yahoo!-Right Media; WPP-24/7 Real Media and the proposed private takeover of Acxiom).
But Google-DoubleClick brings the online ad market beyond a dangerous concentrated tipping point (btw, even the Interactive Advertising Bureau notes in its 2006 online ad revenue review published last May that "Online advertising continues to remain concentrated with the 10 leading ad-selling companies, which accounted for 69% of total revenues in the fourth quarter of 2006. ...") Google dominates the search ad part of the online ad market. It could have competed in the one part of the market it doesn't control, but covets: display ads. But it's simply taking out what should have been a competitor, primarily so they can use the existing business relationships — and strategic information — with each of DoubleClick's deep-pocketed clients. Such a move will create a monopolistic market for Google in what is a critical part of the electronic communications economy. This is true in the U.S. and abroad (an aspect of the case that has been acknowledged by our EU-based consumer group allies).
The online ad market has evolved rapidly and has reached near-maturation in terms of practices, basic applications and distribution pathways. We need to preserve what little competition is still possible. That's why we have told FTC commissioners, merger review staff, the staffs of the Senate Judiciary Antitrust Subcommittee and the House Commerce Committee that the merger must be rejected. We have submitted documents, brought in academic experts and plan to further press for an outright rejection. We also have made it clear that the deal threatens consumer privacy in a very substantial way.
Jeff Chester
Executive Director
Center for Digital Democracy