Google/AdMob Investigation: The Juicier Bits

  |  December 29, 2009   |  Comments

Consumer and privacy advocates don't want the Google/AdMob deal to go through

Consumer and privacy advocates don't want the Google/AdMob deal to go through. That's not exactly a revelation.

Here's are some details on that, or if you already know about it, skip down to "The Back Story"

Yesterday, Consumer Watchdog and the Center for Digital Democracy announced they'd sent the Federal Trade Commission a letter stating the agency should not approve Google's proposed acquisition of the mobile ad net. The FTC sent Google a second request recently, meaning it has escalated its review of the deal.

"In a joint letter to the FTC, Consumer Watchdog and the Center for Digital Democracy (CDD) said Google is simply buying its way to dominance in the mobile advertising market, diminishing competition to the detriment of consumers," wrote the organizations in a press release.

Does that make Google the Yankees of digital media?

Anyway, while the organizations are also worried about potential privacy issues related to the proposed acquisition, the real question here for the FTC is antitrust. For instance, when the FTC investigated - and eventually approved -- the Google/DoubleClick deal, it made clear it did not have legal authority to block the acquisition based on privacy issues or other non-antitrust related grounds.

OK, so, the fact that consumer advocates and other frequent Google critics oppose the AdMob buy is not particularly riveting news for those of us who watch the industry closely.

The Back Story
What is interesting is the back story. Why, for instance, is the FTC investigating this deal while the Department of Justice went after (and killed) the Google/Yahoo search deal? In his post today on Silicon Alley Insider, Nicholas Carlson raises this very question.

His sources, whom he refers to as "pro-Googlers" believe "The FTC wants to make sure it becomes the go-to agency for regulatory issues concerning the mobile space, not the DOJ."

I think he and his sources are on to something. While the FTC has had its hand in the digital acquisition pie more frequently in recent years than the DOJ, there is an ongoing turf battle between the two, according to my own sources.

When it emerged that the DOJ was probing the Yahoo/Google deal, I wrote a piece about the two agencies and why this time the DOJ had taken the reins, rather than the FTC. An antitrust lawyer I spoke with told me it may have been a result of an internal fight, with the DOJ pushing to run the investigation, rather than have to play second fiddle to the FTC.

Marsha! Marsha! Marsha!

In my research for that story, I also learned, "If the FTC were to have taken on the investigation, the potential outcomes probably would be primarily the same. There are differences between the way in which each agency handles such an investigation; yet, a major difference is the FTC has no authority to charge civil penalties or file criminal action on its own."

Yet, these guys still have to work together. Some told me when the DOJ was investigating Yahoo/Google, we could expect the FTC to share information with the DOJ based on its prior work, such as the DoubleClick acquisition investigation.

This might also shed some light. The FTC and the DOJ together issued a document in 2000, intended to guide "business people" involved in deals that could raise antitrust concerns. According to the "Antitrust Guidelines for Collaborations Among Competitors," such an investigation may assess the type of collaboration -- between Google and AdMob, in this case -- and whether it increases their ability or incentives to raise costs, lower output, reduce quality or stifle innovation.


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ABOUT THE AUTHOR

Kate Kaye

Kate Kaye was Managing Editor at ClickZ News until October 2012. As a daily reporter and editor for the original news source, she covered beats including digital political campaigns and government regulation of the online ad industry. Kate is the author of Campaign '08: A Turning Point for Digital Media, the only book focused on the paid digital media efforts of the 2008 presidential campaigns. Kate created ClickZ's Politics & Advocacy section, and is the primary contributor to the one-of-a-kind section. She began reporting on the interactive ad industry in 1999 and has spoken at several events and in interviews for television, radio, print, and digital media outlets. You can follow Kate on Twitter at @LowbrowKate.

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