[Ecommerce] Mergers: Commission clears proposed acquisition of DoubleClick by Google

[Michelle Childs]

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Mergers: Commission clears proposed acquisition of DoubleClick by Google

Reference:  IP/08/426    Date:  11/03/2008


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IP/08/426

Brussels, 11th March 2008
Mergers: Commission clears proposed acquisition of DoubleClick by Google
The European Commission has cleared under the EU Merger Regulation the
proposed acquisition of the online advertising technology company
DoubleClick by Google, both of the US. The Commission=92s in-depth
investigation, opened in November 2007 (see IP/07/1688), concluded
that the transaction would be unlikely to have harmful effects on
consumers, either in ad serving or in intermediation in online
advertising markets. The Commission has therefore concluded that the
transaction would not significantly impede effective competition
within the European Economic Area (EEA) or a significant part of it.

Google operates an Internet search engine that offers search
capabilities for end users free of charge and provides online
advertising space on its own websites. It also provides intermediation
services to publishers and advertisers for the sale of online
advertising space on partner websites through its network "AdSense".

DoubleClick mainly sells ad serving, management and reporting
technology worldwide to website publishers and to advertisers and
agencies. Such technology allows internet publishers and advertisers
to ensure that advertisements are posted on the relevant websites and
to report on the performance of such advertisements.

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. Even if DoubleClick could become an
effective competitor in online intermediation services, it is likely
that other competitors would continue to exert sufficient competitive
pressure after the merger. 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.

The Commission also analysed the potential effects of non-horizontal
relationships between Google and DoubleClick following concerns raised
by third parties in the course of the market investigation. These
relationships concern DoubleClick's market position in ad serving,
where Google, by controlling DoubleClick's tools, could allegedly
raise the cost of ad serving for rival intermediaries, and Google's
market position in search advertising and/or online ad intermediation
services, where Google could allegedly have required purchasers of
search ad space or intermediation to also purchase DoubleClick's tools.

The Commission found that the merged entity would not have the ability
to engage in strategies aimed at marginalising Google's competitors,
mainly because of the presence of credible ad serving alternatives to
which customers (publishers/advertisers/ad networks) can switch, in
particular vertically integrated companies such as Microsoft, Yahoo!
and AOL. The market investigation also found that the merged entity
would not have the incentive to close off access for competitors in
the ad serving market, mainly because such strategies would be
unlikely to be profitable.

The Commission's decision to clear the proposed merger is based
exclusively on its appraisal under the EU Merger Regulation. It is
without prejudice to the merged entity's obligations under EU
legislation in relation to the protection of individuals and the
protection of privacy with regard to the processing of personal data
and the Member States' implementing legislation.

More information on the case will be available at:

http://ec.europa.eu/comm/competition/mergers/cases/index/m94.html#m_4731

---------
Michelle Childs
Head of European Affairs
Knowledge Ecology International
michelle.childs@keionline.org

"The world we have made, as a result of the level of thinking we have
done thus far, creates problems we cannot solve at the same level of
thinking at which we created them=94  Albert Einstein