April 23rd, 2007

What Google’s Double-Click Deal Means

Competitors, customers and even privacy watchdogs have weighed in on the recent Google deal to acquire DoubleClick. If you’re reading this, you should know what what Google does. It’s possible you may not know exactly what DoubleClick does – in a nutshell, it’s a technology platform that publishers and advertisers can use to deliver and track banner and pop-up ads.

Microsoft’s general counsel Brad Smith issued a statement in which he said the proposed acquisition “raises serious competition and privacy concerns in that it gives the Google/Double Click combination unprecedented control in the delivery of online advertising, and access to a huge amount of consumer information by tracking what customers do online”.

The proposed acquisition has been all over the business and marketing media. A good summary of the concerns is available at London’s The Times website.

While it may be ironic that companies like Microsoft and AT&T have expressed concern about antitrust issues (pot calling the kettle black?) emanating from the deal, there is a real need for greater government and watchdog oversight in this area. As a former lawyer whose family business was personally and negatively affected by colluding companies with too much power in their respective markets, this is an area I have written about before, albeit in the distant past.

There are a lot of reasons why antitrust regulators will not likely look to affect this deal, but they should certainly take a close look at it, as Google’s competitors suggest.

Antitrust law has an interesting history and has played a critical role in the United States’ and the world’s economy over the last 100 plus years.

Unfortunately, in the U.S. anyway, government has generally exercised much less oversight and intervention over the last couple of decades in the antitrust arena, which is probably as affected by politics as much as any area of law. Often the burden of proof in showing market power, and abuse of that power, is difficult to overcome – something that should probably be shifted to the accused’s shoulders in certain situations when enough market power and evidence is accumulated.

Not only should potential monopolies be scrutinized, but industry oligarchies too. But antitrust law and enforcement has gone in the opposite direction for a while. For close-to-home examples, the vast majority of world media is now owned by 6 companies and the situation in marketing and advertising itself is very similar. The power these companies wield in these industries alone, and their influence over the governments that should be keeping the playing field more level, is disturbing.