The planned acquisition of online ad firm DoubleClick by search engine giant Google is likely to be delayed, depending on whether or not the European Commission decides upon a full investigation of the deal.
The EC’s competition watchdog has until the end of October to make a decision over an investigation, which would delay the deal for at least four months.
Google had asked the Commission to investigate the deal, as the search engine believes that the deal ‘is good for users and advertisers and it fosters competition’.
The outcome of the case may depend upon whether online advertising, the area in which Google is so dominant, is viewed by the Commission as a separate market, or part of the larger market that includes TV, radio and print advertising.
If online advertising is judged to be a distinct market then Google’s potential dominance of the market may scupper the deal. Google accounted for 40% of online ad revenues in the UK last year, and Google/DoubleClick combined could swallow up 80% of online ads.
Meanwhile, rival Microsoft, which lost out to Google in the battle to acquire DoubleClick, has been busy lobbying against the merger in the US.
The company has joined up with marketing firm Burson-Marsteller to form the Initiative for Competitive Online Marketplace (iCOMP), which has been formed with the intention “to highlight important principles in online services and begin important industry discussions around copyright, privacy, and competition.”
According to Microsoft spokesman Jack Evans:
“Like others, we believe this proposed merger raises serious questions about the future of competition in the online advertising market, as well as about consumer privacy and copyright protection.”
Microsoft recently fell foul of the European Commission itself over anti-competition issues. The software giant was fined $613m (£303m) for breaching EC anti-trust rules.
