Google’s run to buy DoubleClick hit a wall yesterday when the European Commission announced it would take an in-depth look into the potential $3.1bn deal.
The commission said its initial review of the deal raised some anti-competitive red flags, specifically that the combined company would have too much control over the online advertising and ad serving markets.
The commission will rule on whether to block or approve the deal within 90 working days, or by April 2. Its extended probe does not include privacy concerns raised in Europe and the US by consumer groups and privacy advocates.
Google, which first announced the deal in April, wants DoubleClick because it would help it reach beyond its mainstay of search ads, which drive most of Google’s revenue today. Microsoft had also wanted to buy DoubleClick, but was outbid by Google.
Microsoft has been the most vocal critic of the proposed merger and has pled its case to Congress. Microsoft, along with Yahoo and others, claims the deal would give Google, which already leads the online search market, too much power in the market for online ads.
The European Commission said its extended investigation into the deal may lead to anticompetitive restrictions for competitors operating in these markets and thus harm consumers.
Google chief executive Eric Schmidt said the company would continue to work with the commission to demonstrate how our proposed acquisition will benefit publishers, advertisers and consumers.
He said Google sought to avoid further delays that might put it at a disadvantage in competing against Microsoft, Yahoo, AOL and others whose acquisitions in the highly competitive online advertising market have already been approved.
Microsoft acquired ad outfit Aquantive in August for $6bn, in a deal approved by the European Commission.
US Federal Trade Commission antitrust officials also are investing the deal, and their review includes privacy issues raised by consumer and other groups.
Consumer advocates also have raised concerns about data privacy if the deal is approved.
Google is quickly becoming the key digital gatekeeper for the online publishing and advertising marketplace, said Jeff Chester, executive director of Washington-based Center for Digital Democracy. At stake here is more than just the skyrocketing Google share price … there must be meaningful competition and consumer protection in the online ad sector.