Europeans bless Google's merger with DoubleClick

Regulators says the deal won't harm competition in the online ad market.

By Farhad Manjoo
Published March 11, 2008 3:55PM (EDT)

Despite fierce lobbying by Microsoft, Yahoo, and consumer advocates, the European Commission has allowed Google to snap up DoubleClick.

Rivals argued that the $3.1 billion merger between Google, which has a huge market in text ads, and DoubleClick, which serves up graphical Web banner ads, would help create a monopoly in the online advertising market. In December, the U.S. Justice Department disagreed.

Now, so too have European regulators, who said in a statement:

The Commission's in-depth market investigation found that Google and DoubleClick were not exerting major competitive constraints on each other's activities and could, therefore, not be considered as competitors at the moment.... The Commission therefore concluded that the elimination of DoubleClick as a potential competitor would not have an adverse impact on competition in the online intermediation advertising services market.

Google CEO Eric Schmidt says in a press release that approval of the merger will improve ads for advertisers and Web surfers.

Consumer advocates wary of an all-knowing, all-seeing Google are likely to take a dim view. Jeff Chester, executive director of the Center for Digital Democracy, just sent over his views in an e-mail:

It represents the failure of antitrust regulators to understand and respond to the growing consolidation of control over online ad delivery, data collection, and the funding of content. This decision will have profound and unfortunate consequences for the Internet's evolving role as a democratic communications medium.

Chester also warns that the decision paves the way for Microsoft's gobbling up of Yahoo. "By permitting Google to dramatically grow in clout, regulators will have to likely permit the further growth of a No. 2 competitor to Google -- which will be Microsoft."

Let's say "hooray" for duopoly!

Farhad Manjoo

Farhad Manjoo is a Salon staff writer and the author of True Enough: Learning to Live in a Post-Fact Society.

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