Google faces EU charges over DoubleClick deal

The European Commission is planning to issue a statement of objections at the end of this month over the proposed €2.2 billion Google-DoubleClick merger, according to a source close to the investigation.

The statement of objections would flag up potential infringements of EU competition law that might result from the merger. "The concern is that, by virtue of this transaction, Google will obtain a dominant position on the market for online advertising intermediation. The market for matching publishers and advertisers will be dominated by Google," said the source.

The move would follow closely on the heels of the US Federal Trade Commission’s approval of the merger last month (20 December). The FTC concluded that the tie-up between Google, the world’s biggest search engine, and DoubleClick, an online advertising tracker, would not harm competition.

But Google’s main rivals, including Microsoft and fellow search engine Yahoo, claim that the company would eventually control the bulk of the €20 billion online advertising industry, effectively becoming a gatekeeper for the market.

The Commission has come under significant pressure from privacy campaigners to include data protection issues in its investigation. Campaigners fear that the merger would allow Google to exploit the world’s largest databases of online user data to target advertising at consumers.

The European Parliament will host a hearing on the matter this month (21 January) with the aim of persuading the Commission to broaden the scope of its investigation. National data protection watchdogs, which are currently carrying out their own inquiry into Google’s data retention practices in the context of the article 29 working party, are expected to attend.

A Commission official said that, under EU competition law, the Commission was limited to deciding "purely on the question of whether the merger would have any adverse effect on competition". Any steps outside this legal remit, he said, would leave rulings open to being overturned in court.

The FTC, which, as a sop to campaigners, annexed recommendations on data collection and privacy to its final ruling on the merger, is bound by the same constraints as the Commission. "Not only does [the FTC] lack legal authority to require conditions to this merger that do not relate to antitrust, regulating the privacy requirements of just one company could itself pose a serious detriment to competition in this vast and rapidly evolving industry," it said in a statement last month.

A spokesman for Google said: "This is an ongoing investigation. We hope the Commission will come to the same conclusion as the FTC, who cleared the deal without any conditions."

The Commission open-ed a second phase investigation of the deal in November. Google and DoubleClick would be entitled to respond to the expected statement of objections before the deadline for a final decision on 2 April. The statement of objections would not necessarily prejudge the final ruling.

The European Commission is planning to issue a statement of objections at the end of this month over the proposed €2.2 billion Google-DoubleClick merger, according to a source close to the investigation.