Google Wins EU Approval, Wraps Up DoubleClick Deal

Search titan Google Inc. wasted no time completing its $3.1bn acquisition of online advertising group DoubleClick yesterday after winning approval from the European Commission, the 27-nation EU's antitrust authority in Brussels, accelerating its dominance of the online advertising market.

The move ends almost a year of uncertainty surrounding the Google/DoubleClick merger deal that is opposed by three notable privacy and consumer groups. The privacy groups had urged the Federal Trade Commission (FTC) to halt the merger on privacy grounds, contending the deal is a threat to privacy rights.

The online advertising and internet search giants Google last year in April announced it would be purchasing Web advertising tools provider DoubleClick Inc. for $3.1 billion, in order to pace up its push into the graphic ad market by acquiring the software for creating and assessing Internet advertising campaigns.

But, concerned with the proposed deal, the Electronic Privacy Information Center along with the Center for Digital Democracy (CDD) and US Public Interest Research Groups (US PIRG) filed the complaint in April with the FTC, alleging that Google and DoubleClick aggregate exhaustive personal data on consumers using the Internet but don't adequately protect the privacy of that information.

Google, the provider of the most-popular search-engine, finally received green signal from the FTC in December last for its controversial acquisition of fellow online advertising firm DoubleClick. But, Google was not able to formally close its DoubleClick acquisition as the clearance from European regulators was still pending.

Now, three months after FTC’s ruling, the European regulators on Tuesday approved Google’s acquisition of DoubleClick, saying the transaction wouldn't harm competition in the online ad market.

"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," the EC said in a statement. "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 EU approval is a blow to Yahoo! Inc. and Microsoft Corp., which expressed concerns that Google's planned acquisition would give its rival more than 80 percent of the market for ads displayed on third-party Web sites, and would hurt competition in the $40.9 billion global online ad market.

“With DoubleClick, Google now has the leading display-ad platform,” Google Chief Executive Officer Eric Schmidt said in a statement. Google may cut an unspecified number of jobs in DoubleClick's U.S. operations and possibly in other regions, he added.

Google shares rose $26.22, or 6.3 percent, to $439.84 in NASDAQ Stock Market trading.