Google's 'DoubleClick' Deal comes under Threat

Concerned with Google Inc.'s proposed $3.1 billion agreement to acquire fellow online advertising firm DoubleClick, three notable privacy groups have urged the Federal Trade Commission (FTC) to halt the merger on privacy grounds, contending the deal is a threat to privacy rights.

The Electronic Privacy Information Center along with the Center for Digital Democracy (CDD) and US Public Interest Research Groups (US PIRG) has filed the complaint Friday with the U.S. Federal Trade Commission, alleging that Google and DoubleClick aggregate exhaustive personal data on consumers using the Internet but don't adequately protect the privacy of that information.

The trio urged the FTC to investigate and block the deal, arguing the merger would violate agreed limits on how much data advertisers collect on consumers and seeking an injunction.

"Neither Google nor DoubleClick have taken adequate steps to safeguard the personal data that is collected," the complaint states. "Moreover, the proposed acquisition will create unique risks to privacy and will violate previously agreed standards for the conduct of online advertising."

The groups want both companies to erase browser cookies along with setting up an opt-in system for browser tracking, as they say user-identified cookies from both Google and DoubleClick are dangerous and they want all such cookies to be erased unless the user explicitly agrees to tracking. In addition, the groups also want Google to destroy all tracking cookies after a search session ends.

The privacy activist groups asked the commission to order Mountain View, California-based Internet search provider to improve privacy practices and make formal guarantees it will not retain certain user info before the merger can be approved.

"Google's proposed acquisition of DoubleClick will give one company access to more information about the Internet activities of consumers than any other company in the world," the complaint argues.

Meanwhile, New York-based DoubleClick tried to assure the consumers that proprietary information will not pass over to Google. It said the search giant would not have access to the data it collects on consumers who view its online ads. “Ownership rights will be unaffected by any acquisition,” said DoubleClick, adding that the data belongs to clients.

Nicole Wong, an associate general counsel for Google, called the charges baseless and said that Google complies with accepted privacy standards.

The merger with DoubleClick, which serves up billions of graphical display ads every day from corporate marketers on thousands of sites across the Web, will extend Google's dominance of the online ad market.

If approved, the deal would close as planned later in 2007, after which Google, the leader in an alternative form of online marketing that places ads alongside Web search results, would emerge as an even more powerful force in the online ad market.

Shares of Google were up $12.39, or 2.7 percent to $484.04 on Friday in afternoon trading on the NASDAQ Stock Market.