September 26, 2007 8:45 PM PDT
Microsoft, Google square off in Washington
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Microsoft spokesman Jack Evans added in an interview on Wednesday, referring to the proposed merger: "We believe it raises some serious questions about the future of competition in the online advertising market. It raises concerns about consumer privacy, security, and copyright protection."
After their own recent high-profile acquisitions, however, it's required some careful political legerdemain for Microsoft and other Google rivals to argue against the DoubleClick purchase. Yahoo bought online advertising firm Right Media. AOL bought German ad-serving firm Adtech AG and Tacoda, which does online behavioral targeting. Microsoft spent $6 billion buying advertising firm Aquantive, a DoubleClick rival, and online advertising exchange AdECN Inc.
Chairing Thursday's hearing will be Sen. Herb Kohl, a Wisconsin Democrat with a personal net worth of about a quarter-billion dollars and whose family made its fortune with the Kohl's department store chain.
Kohl can be more free-market than most Democrats on taxation, but tends to be regulatory when it comes to antitrust topics. He strongly opposed the merger of XM and Sirius Satellite Radio and said in 2001 that "vigorous application of well-established antitrust laws" would stabilize prices in the oil industry.
Kohl has indicated that privacy concerns--DoubleClick has long been a bete noire of privacy organizations--would be part of the hearing and has invited Marc Rotenberg of the Electronic Privacy Information Center to testify.
EPIC and two other liberal groups opposed Google's acquisition of DoubleClick, telling the FTC that "the proposed acquisition will create unique risks to privacy" to "more than 1.1 billion Internet users around the world."
"Privacy has been integral to the FTC's reviews of online advertising in the past, and it should be to its review of the Google-DoubleClick merger," Rotenberg said Wednesday evening. "I think we have a very solid case. It's solid in two different respects. First, it relies on the FTC's precedent. Second, it's based on very detailed filings we've made with the FTC about Google and DoubleClick's business practices. I think the FTC will either block or modify the deal."
For its part, Google has described its DoubleClick purchase as a way to protect privacy. In Drummond's written testimony, he says that Google will include an opt-out mechanism prohibiting advertising cookies from being placed on their computer and extend its current partial-anonymization policy to apply to wiping DoubleClick log data after 18 months.
"We make privacy a priority because our business depends on it," Drummond wrote. "If our users are uncomfortable with how we manage the information they provide to us, they are only one click away from switching to a competitor's services. If you don't believe me, recall that before Google, users clicked on an earlier generation of search engines like Excite, Altavista, Lycos, and Infoseek--each extremely popular in its time."
CNET News.com's Declan McCullagh is married to a Google employee.
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