Microsoft
has urged the US government to block
Google's
planned
acquisition of
DoubleClick.
Testifying before the Senate Subcommittee on Antitrust, Competition Policy
and Consumer Rights, Microsoft claimed that the purchase would create an illegal
monopoly in the online advertising market.
The merger would allow Google to control 80 per cent of the online
advertising market, spanning text and banner ads, allowing the search giant to
dominate the market, argued Microsoft general counsel Brad Smith.
Google would also gain control of the world's largest databases of online
user data. This information would allow Google to better target its
advertisements, but raises questions about privacy, alleged Smith.
"One question is whether this merger will create a whole new meaning to the
term 'being Googled'," he quipped.
Microsoft first
raised
its objections to the DoubleClick acquisition in April.
In a separate testimony on 27 September, Google's chief legal officer David
Drummond denied any antitrust implications in the $3.1bn acquisition.
"Online advertising benefits consumers, promotes free speech and helps small
businesses succeed," Drummond testified.
"Google's acquisition of DoubleClick will help advance these goals while
protecting consumer privacy and enabling greater innovation, competition and
growth."
He added that the markets for text and display advertisements are
complementary businesses.
DoubleClick helps deliver ads to third-party websites by allowing them to
manage and measure campaigns, but does not sell any advertisements.
Google, by comparison, is in the business of directly selling text
advertisements for placement near its search results or on third-party websites.
Google also claims to see further evidence of the market's competitiveness in
a series of acquisitions by
Yahoo and
Microsoft following the announcement of the DoubleClick deal.
In a monopoly market, the search giant argues, Microsoft would not have
spent $6bn
buying
aQuantive,
a direct competitor to DoubleClick.
Drummond also attempted to eliminate any privacy concerns. Although he
admitted that the bundling of the user data from DoubleClick and Google will
allow for better targeting of advertisements, he claimed that Google has no
plans to exploit its position in that market.
Citing a
recent
decision to render its its server logs anonymous after 18 months and reduce
cookie life spans from 30 to 24 months, Drummond argued that Google is firmly
committed to protecting its users' privacy.
"We are constantly working to innovate in our privacy practices and policies,
" he said. "For us privacy does not begin or end with our purchase of
DoubleClick. Privacy is a user interest that we have been protecting since our
inception."
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