Congress Scrutinizes Google’s Latest Purchase

Washington, D.C., September 27, 2007—Google’s proposed buyout of online advertising company DoubleClick will be getting scrutinized today by members of the Senate Judiciary Committee. Senators and witnesses are likely to focus on a controversial marketing strategy created by DoubleClick several years ago but later abandoned over consumer privacy concerns.

"Privacy concerns could be a legitimate fear, but existing federal and state laws and new and upgraded industry practices are in place to protect consumers," said Competitive Enterprise Institute Technology Policy Analyst Cord Blomquist. "Denying an acquisition because the firm supposedly violated consumer privacy several years ago is the worst and costliest way to address consumer concerns. DoubleClick paid its dues through a number of high cost settlements with several governments in the United States; it should not be branded a habitual infringer of consumer privacy."

Sen. Herb Kohl (D-WI), chairman of the Subcommittee on Antitrust, Competition Policy and Consumer Rights, has called the hearing in advance of a decision by the Federal Trade Commission on whether or not to allow the acquisition to move forward. Sen. Kohl has previously expressed his hostility to other tech industry mergers on antitrust grounds, urging the Federal Communications Commission earlier this year to block the unification on XM and Sirius Satellite Radio.

Other than some nebulous, speculative predictions of privacy worries, opponents of the deal have presented nothing approaching actual evidence of consumer harm. "There are no concrete legal reasons to oppose this move by Google," said Blomquist. "The acquisition would actually make the market more competitive by allowing Google to compete with Yahoo in image-based advertising. As is the case with most criticism of acquisitions, facts and economic reality hardly influence regulators and Congress."