…Google faces challenges, antitrust attorneys have said.
"This deal raises very serious concerns. I would not assume it will be permitted," said Thomas Vinje, an antitrust attorney with Clifford Chance in Europe.
European antitrust regulators will issue a decision by 2 April on whether to block or allow the deal to go through. Meanwhile, Google still isn't off the hook in the US. The Federal Trade Commission (FTC) notified Google in May that it needed more information to evaluate the DoubleClick merger, as part of its "second request for information". The FTC will render a decision on whether to challenge the merger or allow it to proceed within 30 days after Google has certified it has complied with the FTC's second request. (Google complied with the request on 14 November, a company spokesman said.)
"It's quite possible that the FTC will decide whether to challenge the deal before [the Commission's deadline of] 2 April," Vinje said. But "the Commission will do what it believes European antitrust law to require, whether the FTC challenges the deal or not".
The FTC and the European Commission declined to comment. DoubleClick declined to comment on whether it has complied with the FTC's request for more information. Meanwhile, Australian and Brazilian regulators have approved the deal.
In a previous statement, Google chief executive Eric Schmidt said the company will continue to work with the European Commission to demonstrate how its DoubleClick acquisition could benefit publishers, advertisers, and consumers. The company also noted it remains "confident" that the FTC will determine the merger will also benefit a similar set of users.
US senators Orrin Hatch and Herb Kohl, however, sent a letter on Monday to the FTC, citing concerns that the deal would harm competition. The senators cited the dominance Google and DoubleClick have in their respective areas of the advertising market.
The European Commission, as it proceeds in evaluating the Google-DoubleClick deal, may have concerns over whether a challenge to the merger will ultimately be overturned by the European Court of First Instance, which serves as an appeals court.
The court has overturned the European Commission before on its merger decisions. Previously, the European Commission gave the green light to the Sony and BMG merger, only to have third parties appeal the deal to the Court of First Instance and have it overturned, said David Anderson, a partner in the Brussels office of law firm Berwin Leighton Paisner.
"The Commission is seeking to make its [merger] clearances, as well as its prohibitions, as appeal-proof as possible," Anderson said.
Talkback
I really think EU law makers missunderstand the nature of the web, their objection is based on the assumption that google would dominate advertising by stifling the competition. what they fail to understand is that unlike with Microsoft before, where software is preinstalled on the computer, online advertising is an open market; an advertiser can easily move from service to service.
would a combination of google and doubleclick put them in a dominant position? there's no guarantee of that; like Google, both Yahoo and Microsoft have acquired companies in this area. who wins will depend on the service/tools they offer and the advertiser will be the judge.
If Google/DoubleClick dominate online advertising, it will be because they've earned it by offering a good service, not because advertisers have no alternative.