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Google-Doubleclick Deal Trouble

WASHINGTON (AP) – A Senate hearing Thursday could reveal how much congressional opposition is developing to Google Inc.'s controversial $3.1 billion acquisition of online advertising firm DoubleClick Inc.

The proposed deal, announced in April, faces strong opposition from consumer privacy groups, who are pressing the Federal Trade Commission to block it unless Google significantly alters its privacy practices.

In addition, Microsoft Corp. has said the transaction raises antitrust concerns because it would give Google too much control over the online ad market. Microsoft wanted to purchase DoubleClick but lost out to Google.

Lynn Becker, a spokeswoman for the Senate Judiciary Committee's antitrust panel, said the hearing will examine the transaction and broader consolidation in the online advertising market.

While senators can't block the deal, they can express their concerns to antitrust regulators about combinations they oppose.

Some members of Congress have already done so. Rep. Bobby Rush, an Illinois Democrat, wrote the FTC in July that there is “growing alarm over the implications for consumer privacy from the practices of these companies, especially if they combine.”

Brad Smith, Microsoft's general counsel, and Marc Rotenberg, executive director of the Electronic Privacy Information Center, are scheduled to testify before the subcommittee. The hearing is scheduled for 2:30 p.m. EDT Thursday.

Rotenberg's group has objected that the acquisition would give Google access to an unprecedented amount of data on consumers' Web usage and Internet search preferences.

DoubleClick places and tracks online ads for its customers, and in the process collects data on consumer Web surfing habits. Google, the world's largest search engine, retains information on its users' searches.

David Drummond, chief legal officer at Google, will highlight several of the company's recent privacy intitiatives, according to a written copy of his testimony. The company has said it will make the search requests it stores anonymous after 18 months and has called for international privacy standards.

In addition, the online search giant doesn't compete directly with DoubleClick, Drummond's testimony says, and therefore the deal won't limit competition. Unlike Google, DoubleClick doesn't sell advertising, but instead provides technology and services to companies seeking to place display ads online, the testimony said.

After the Google-DoubleClick deal was announced, Microsoft said it would pay $6 billion for Seattle-based online advertising firm aQuantive Inc. and Yahoo Inc. agreed to buy Right Media Inc. for $680 million.

The deals are evidence of “strong competition in the online advertising space,” Drummond's testimony says.