The AAI sent a report entitled “Google Acquisition of Doubleclick: Antitrust Implications” to the FTC today (November 6, 2007). They noted that “[P]ublicly available information suggests that Google’s acquisition of DoubleClick, which is presently being considered by the Federal Trade Commission and European Commission, raises serious competitive issues under several different antitrust theories. In this white paper, we present some background and brief analysis of the principal competitive considerations under U.S. antitrust law.”
Here’s are some key excerpts (our italics):
“The integration of search, contextual, and display advertising, even if it offers efficiency benefits, may have exclusionary effects if advertisers using rival search engines or advertiser tools cannot replicate the benefits of such integration. For example, post-merger, advertisers using DART for Advertisers or other DART advertiser tools may be unable to get the same quality of access to data and reporting on their search or other campaigns with non-Google search engines or ad networks as they can with Google search or AdSense. Moreover, advertisers that use non-DART advertiser tools may be unable to get the same quality of access to data and reporting on their Google search or AdSense campaigns that is available to advertisers using DART’s advertiser tools. In these cases, Google’s dominant position in search (and contextual) advertising will be further entrenched, and DoubleClick’s leading position in advertiser tools will be cemented. As a result, the lessening of competition in the search market and advertiser tools market may outweigh whatever efficiency benefit may result from integration…Based on the information presented here, AAI believes there is a good argument that Google and DoubleClick are horizontal competitors in two relevant markets. The first is the market for distributing online advertising space of third party (non-search) web sites, where Google’s AdSense is the market leader. The second is the market for publisher ad serving tools, where DoubleClick’s DART for Publishers is the dominant product. While the competition between Google and DoubleClick in these markets may be more potential than actual, the two companies are perhaps uniquely positioned to capture significant market share in each other’s markets. If the evidence confirms that these markets are concentrated and that entry is otherwise difficult, as appears to be the case, then the merger presents a relatively straightforward case for challenge under the horizontal and non-horizontal merger guidelines. We see little in the way of merger specific efficiencies that would offset the loss of competition…If foreclosure were the only issue, it might be resolved by placing conditions on the merger, even though there are costs involved in enforcing a regulatory decree. But unless the horizontal concerns are rebutted, AAI believes that the prudent course is for the FTC to block the merger.”