EU Approves Google-DoubleClick Merger

Google-DoubleClick is now a reality.

The two companies' merger cleared a final regulatory hurdle Tuesday when the European Commission gave its blessing to the search company's $3.1 billion acquisition of the online ad provider. Google announced that the acquisition had closed shortly thereafter.

"The transaction would be unlikely to have harmful effects on consumers, either in ad serving or in intermediation in online advertising markets," the EU concluded.

Google announced in April 2007 that it would acquire DoubleClick for $3.1 billion in cash.

"We are thrilled that our acquisition of DoubleClick has closed," said Eric Schmidt, Google's chairman and chief executive officer, in a statement. "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."


Together, Google and DoubleClick will be able to deliver more relevant advertising and improve the effectiveness, measurability and performance of digital media for publishers, advertisers and agencies.

The E.U.'s competition regulator reached its decision after a four-month in-depth investigation of the $3.1 billion merger, which received the approval of the U.S. Federal Trade Commission in December.

The deal is unlikely to harm consumers in ad serving or online advertising intermediation markets, the Commission said.

A merger of Google and DoubleClick will not hurt competition because the companies are not competitors, the Commission said: Google provides online advertising space on its own sites and, as operator of the AdSense service, an intermediary between publishers and advertisers, while DoubleClick offers ad serving, management and reporting services to publishers, advertisers and agencies.

The Commission also examined the risk of Google tying sales of its services to use of those of DoubleClick, or vice versa, to boost revenue. However, it concluded that Microsoft, Yahoo and AOL present sufficiently strong market alternatives that a merged Google-DoubleClick would be unable to exploit the link in that way.

The Association for Competitive Technology (ACT), a Washington, D.C., lobby group for small and midsize entrepreneurial technology companies, welcomed the Commission's decision.

"It demonstrates both the dynamism of our industry and the need to give companies the flexibility necessary to adapt, compete, and meet the needs of consumers," wrote ACT President Jonathan Zuck.

"The merger will undoubtedly change the competitive landscape of our industry and fuel the evolution of internet advertising," he said.

Microsoft is likely to be the biggest beneficiary of the antitrust authorities' approvals, according to Jeff Chester of the Center for Digital Democracy, one of the lobby groups opposed to the merger.

Microsoft recently offered to buy Yahoo for $44.6 billion. If that deal goes ahead it will almost certainly attract the scrutiny of antitrust regulators, as it unites the two biggest players in online advertising after Google.

"By permitting Google to dramatically grow in clout, regulators will have to likely permit the further growth of a number-two competitor to Google, which will be Microsoft," Chester said.

The result will be the emergence of a global digital duopoly over online advertising, Chester warned.

Tuesday's decision only relates to E.U. merger regulations, the Commission said, and does not alter the merged entity's obligations under E.U. law on the protection of individuals and the protection of privacy related to the processing of personal data.

Antitrust regulators have failed to respond to the growing consolidation of control over online ad delivery and data collection, a failure that will have unfortunate consequences for the Internet's role as a democratic communications medium, said Chester.