Stay on Top of Enterprise Technology Trends
Get updates impacting your industry from our GigaOm Research Community
Update: The US Federal Trade Commission announced its approval this morning. Details at our sister site paidContent.org.
Beuc, the pan-European umbrella for 41 pro-consumer groups across the continent, has written to European competition commissioner Neelie Kroes with a number of oppositions to Google’s (NSDQ: GOOG) planned $3.1 billion acquisition of the DoubleClick web ads network. Beuc, which already raised several warnings to the commissioner in June, is turning the screws further to warn the deal would create a “monopoly”. Highlights of the letter…
– Prices: Beuc warns Google will be free to raise prices to advertisers and could prevent rival ad networks from operating with DoubleClick’s infrastructure. “Web publishers would likely see a reduction in the revenue they receive from Google.” A real Doomsday scenario – it warns advertisers could be moved to shift their budgets to offline media, leading to a reduction of revenue that could force ad-funded publishers to introduce subscription fees. “This could force some web publishers out of business or prevent the development of new websites … web publishers may not be able to offer as much content as they do now.”
– Competition: The buy-up would place the online ads market “in jeopardy” because Google “will dominate both major pipelines” – both search and organic ads. “It will eliminate nascent competition between the companies for both stand-alone ad serving tools and integrated ad networks.” Beuc is “deeply concerned” consumers will be “significantly harmed” and “there will be no real alternative to the combined entity for advertisers and web publishers”.
– Consumers: End users “will face higher prices for the products, services and content they access online, encounter fewer choices, and experience less innovation and quality in online offerings”. Beuc says increased prices charged to advertisers will be passed on to consumers.
– Privacy: That old chestnut. Because industry competition will have been lessened by the merger, “competitive constraints on (GoogleClick’s) tracking and profiling practices will be fundamentally weakened”. Beuc fears Google would lose current incentives to innovate in the pro-privacy space, adding consumers who withhold more data than others may, for example, be charged more for online goods than those about whom more detailed profiles are kept.
Beuc carries some sway around a Brussels so concerned with protecting consumer rights. The European Commission is currently conducting a widened-out investigation in to the proposed merger, due to complete on April 2, after initially finding competition concerns in the deal. Sources close to the deal reckon America’s Federal Trade Commission will approve the proposal next week, Bloomberg says.
(Photo: keso, some rights reserved)