WASHINGTON (AFP) — Microsoft on Thursday urged a US Senate panel to oppose Google's purchase of online ad targeting colossus DoubleClick, arguing that the 3.1 billion dollar deal threatens competition and privacy.
Microsoft general counsel Brad Smith condemned the pending Google-DoubleClick deal during an antitrust hearing led by a senator who warned the acquisition "warrants close examination."
"If Google and DoubleClick are allowed to merge, Google will become the overwhelmingly dominant pipeline for all forms of online advertising," Smith told Senator Herb Kohl, chairman of antitrust subcommittee, at a hearing.
"This merger will almost certainly result in higher profits for the operator of the dominant advertising pipeline, but it will be bad for everyone else," Smith said.
Google chief legal officer David Drummond defended the deal, countering that the world's leading Internet search engine and DoubleClick were complementary companies and not competitors.
"We are confident, and numerous independent analysts have agreed, that our purchase of DoubleClick does not raise antitrust issues," Drummond testified.
"The simplest way to look at this is by way of analogy. DoubleClick is to Google what FedEx or UPS is to Amazon.com," he said, referring to the main US package delivery companies and the popular retail website.
While buying DoubleClick will help Google improve sales of display ads it will not block other companies from competing, Drummond said.
Drummond pointed out that rivals Microsoft, Yahoo and America Online made deals recently to acquire ad-specialty firms.
Microsoft agreed to pay six billion dollars for ad-targeting firm aQuantive and Yahoo paid 680 million dollars to take the reins of Internet ad broker Right Media.
AOL recently bought ad-serving companies ADTECH and TACODA, which specializes in behavioral targeting of online ads.
Internet rights advocates and the president of technology market research firm Precursor joined Microsoft in calling on senators to use their influence with federal regulators to stop Google from completing the DoubleClick buy.
US senators do not have the authority to block the deal but can sway antitrust officials at the Federal Trade Commission, which is looking into whether Google would get unfair marketplace clout by owning DoubleClick.
Google has asked regulators in the European Union to review and endorse the DoubleClick deal.
"This merger and the ongoing consolidation in the Internet advertising industry as a whole raises important issues of consumer privacy," Kohl said.
"Google collects an enormous amount of information on computer users' search history and Internet preferences."
In a practice common in the industry, DoubleClick installs software bits referred to as "cookies" on Internet users' computers to track where they go online and what pages they view.
Privacy advocates fear that Google and DoubleClick would be able to merge their expansive databases regarding people's Internet activities.
"This merger review is a watershed moment for internet competition," Precursor president Scott Cleland testified at the hearing.
"I believe Google-DoubleClick is clearly one of the most far-reaching, least-understood and important mergers this subcommittee has ever reviewed."
Copyright © 2013 AFP. All rights reserved. More »