A quartet of European consumer advocacy organizations have raised concerns regarding the proposed acquisition of DoubleClick by Google, expected to go through by the end of this year.
BEUC, Altroconsumo, OCU and VZBZ expressed concerns in a June 27 letter to the European commission.
“We are concerned in particular that the proposed transaction may have a negative impact on the selection of online content available to consumers and on privacy,” the letter begins. “We recall here the Commission Notice on Horizontal Mergers (OJ 2004 C 31, pp. 5-18, [especially] paragraph 8), according to which merger control is aimed at preventing mergers that are likely to deprive consumers of the benefits of effective competition, including not only low prices but also high quality products, a wide selection of goods and services, and innovation.”
The letter claimed that, through its acquisition of DoubleClick, Google could monopolize the online advertising business, thereby restricting competition and raising privacy concerns over control of consumer data.
“Just as Microsoft dominates office applications through its operating system, we fear that Google will vertically leverage (bundle/tie) its keyword search dominance with DoubleClick’s leadership in online banner/video display advertising, and with its Google-YouTube dominance in video search. This vertical combination could give Google-DoubleClick clear dominance on the overall market for advertisements provided to third-party Web sites,” the letter says.
Google currently holds a 90 percent share of the search market in Germany, nearly 75 percent in Britain, around 82 percent in France and 90 percent in Spain.
Giving Google such great market power could have a negative impact on the diversity of content available online (broadly meaning content available via PC, mobile, and interactive TV). This was among the top concerns of the European organizations.
“Since it would be practically impossible for users after the merger to avoid all Web sites serving Google/DoubleClick ads, consumers would have no real ability to choose services other than those served by Google, or to simply opt out of sharing personal data with Google,” The letter says. “To put it in simple words, a Web site will have to be part of the Google network of content sites if they are to be viable and visible in the commercial market.”
The combination of Google and DoubleClick means that a single entity will have access to a huge amount of personal information about users, by building profiles of consumers as they engage in searches, mining data from them as they use Web services and applications, and observing and tracking them as they visit sites across the Web.
With the acquisition of DoubleClick, Google will combine two largely complementary existing databases.
“Never before has one single company had the market and technological power to collect and exploit so much information about what a user does on the Internet,” the letter continues. “With DoubleClick’s cookie-tracking technologies, and Google’s ever-increasing breadth of online services (from mail and messaging, to mapping, electronic payment, office applications, user-generated video and blogging spaces, and so on), a particular user’s online activities will be [trackable] by a single entity on a much more continuous and universal level than ever before.”
The organizations are concerned that visibility into consumer behavior will allow Google to build user profiles which are much more complete, and in turn valuable to advertisers.
“The monopoly power that Google will acquire through this acquisition,” the letter says, “will further weaken its incentives to compete on the non-price aspects of its services, including such quality factors as the privacy protections it offers consumers.”
Directors of all four organizations signed the letter and are awaiting a response from the commissioner.
