Europe Clears Google's DoubleClick Acquisition, and Deal Closes Immediately
UPDATE: The companies completed the transaction immediately after European regulators gave it the green light.
The European Commission announced today it has cleared Google’s $3.1 billion acquisition of DoubleClick. The group concluded the transaction was “unlikely to have harmful effects on consumers, either in ad serving or in intermediation in online advertising markets.”
The deal closed shortly after the announcement.
Following an in-depth investigation of the deal, the Commission found it would not impede effective competition within the European Economic Area. Google and DoubleClick “were not exerting major competitive constraints on each other’s activities and could, therefore, not be considered as competitors at the moment,” noted a press release from the regulatory body.
Approval of the acquisition “leapfrogs” Google’s ability to enable third party ad tracking, said Penry Price, Google’s VP ad sales North America, during a talk with members of the press this morning at the company’s New York offices. Price admitted Google’s AdSense network has “been below par because [our] tools and functionality were not equal” to other systems.
The European Commission was expected to take a tougher approach, and opened a phase two investigation of the acquisition in November, suggesting serious doubts about its effects on competition in the E.U.
The acquisition passed scrutiny despite concerns that the European Commission would consider privacy issues in its investigation. In January, the European Parliament held a hearing on “Data Protection on the Internet” to discuss the potential privacy implications of the deal, as well as wider privacy concerns surrounding Internet data.
The Commission has stressed the clearance is based solely on its investigation under the E.U. Merger Regulation, and has no relation to concerns raised surrounding issues of privacy or data protection.
Douglas Lahnborg, an antitrust partner at Heller Ehrman, suggested the motivation for the European Commission’s in-depth investigation may have been to familiarize itself with an industry it has had little experience with to date. It could have served as an “educational exercise” of sorts, he told ClickZ News.
The Center for Digital Democracy, a detractor of the deal from the start, sounded a quite different note. Executive Director Jeff Chester said the European Commission approval “represents the failure of antitrust regulators to understand and respond to the growing consolidation of control over online ad delivery, data collection, and the funding of content.”
The Federal Trade Commission approved the deal in December, following a months-long investigation and vociferous opposition from privacy advocates and industry players including Microsoft. Indeed, not only did the buy spur Microsoft to snap up DoubleClick’s ad management rival aQuantive, owner of Atlas, for a whopping $6 billion; Microsoft has been entrenched in a battle to purchase Yahoo, acknowledging it may be the only way the two can compete with Google.
“E.U. and U.S. antitrust regulators have also perversely set the stage for Microsoft’s goal of acquiring Yahoo, furthering more concentration of control in the new media sector,” he continued.
Google’s Price said discussions of product integration with DoubleClick have been limited due to regulatory compliance.
Online publishers and advertisers have expressed concern Google could tap into the reams of data flowing through DoubleClick’s ad management system to manipulate ad prices. Still, other industry insiders believe the interactive ad industry is teeming with potential for competition in current and yet-to-be-imagined sectors.
The E.U. release said the merged entity would not have the ability to marginalize Google’s competitors, thanks to the presence of significant and competitive alternatives including Microsoft, Yahoo and AOL. It added that Google would have no incentive to restrict competitors’ access to the ad management market, as such strategies would be unlikely to be profitable.
In a statement, Google Chairman and CEO Eric Schmidt said, “With DoubleClick, Google now has the leading display ad platform, which will enable us to rapidly bring to market advances in technology and infrastructure that will dramatically improve the effectiveness, measurability and performance of digital media for publishers, advertisers and agencies, while improving the relevance of advertising for users.”
Kate Kaye contributed to this article.
