European Commission clears proposed acquisition of DoubleClick by Google

United Kingdom

On 11 March 2008, following a Phase II investigation, the European Commission unconditionally cleared the US$3.1 billion acquisition of the online advertising technology company DoubleClick by Google. The US Federal Trade Commission approved the deal without remedies in December 2007. The deal had been reviewed in-depth and the clearance comes against a backdrop of opposition by industry rivals such as Microsoft. Microsoft’s recent $44.6 billion Yahoo bid was rejected by Yahoo’s Board, but merger clearance for Google-DoubleClick on both sides of the Atlantic could help Microsoft's position to obtain merger clearance if the acquisition of Yahoo were to proceed.

The Commission concluded that because Google and DoubleClick could not yet be considered direct competitors in the online advertising market, the transaction would not significantly impede effective competition. Therefore, the acquisition would be "unlikely to have harmful effects on consumers".

Google provides online advertising space, and Internet-based applications for searching, organising and sharing information, whereas DoubleClick supplies technology solutions for the delivery, management and reporting of display advertisments to advertisers, advertising agencies, and website publishers. The Commission found that Google and DoubleClick were not exerting major competitive constraints on each other's activities either in advertisement serving or in intermediation in online advertising markets, and that other competitors would continue to exert sufficient competitive pressure after the merger in the online intermediation advertising services market.

The Commission also analysed the non-horizontal relationships between Google and DoubleClick. These concerned DoubleClick's market position in advertisement serving, where it was alleged that Google could raise the cost of advertisement serving for rival intermediaries, and require purchasers of search advertisement space or intermediation also to purchase DoubleClick's tools. The Commission found that the merged entity would not have the ability to marginalise Google's competitors, because of the presence of substitutable alternatives to which customers could switch, specifically, vertically integrated companies such as Microsoft, Yahoo and AOL.

Please click here for Commission's press release on this.