DoubleClick buy gets OK from EC

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BRUSSELS -- The European Commission on Tuesday gave the unconditional green light to Google's $3.1 billion takeover of online advertising broker DoubleClick.

The clearance marks a setback to rivals Yahoo! and Microsoft, who argued that the purchase would reinforce Google's dominant position on the Internet. It also was fiercely opposed by privacy advocates, who fear that the merger will create an intrusive data collection colossus.

DoubleClick is the world's largest broker of online banner advertising. Its products allow customers to place and track online advertising, including search ads. The deal will allow Google to expand beyond search ads into such graphical displays as banner ads, giving it a larger slice of the advertising budgets spent online.

After a six-month antitrust investigation, the commission concluded that the deal would not harm competition or consumers either in ad serving or in intermediation in online advertising markets.

"Google and DoubleClick were not exerting major competitive constraints on each other's activities and could, therefore, not be considered as competitors," a commission statement said.

It added that the merged entity would not have the ability to marginalize Google's competitors, mainly because of the presence of credible ad-serving alternatives to which publishers and advertisers can switch -- in particular, such vertically integrated companies as Microsoft, Yahoo! and AOL.

"The market investigation also found that the merged entity would not have the incentive to close off access for competitors in the ad serving market, mainly because such strategies would be unlikely to be profitable," the commission said.

Microsoft and Yahoo lobbied against the deal, saying it would damage competition and give Google a monopoly in the $40.9 billion global online advertising market. In September, Microsoft general counsel Brad Smith said the deal would give Google "sole control over the largest database of user information the world has ever known." The U.S. Federal Trade Commission approved the deal in December without imposing asset sales or other conditions.

Consumer groups objected to the deal, saying it would give the two firms unprecedented access to information about consumers. European consumer group BEUC said that "unprecedented and unmatched databases of user profiles" seem to be "in clear violation of users' privacy rights." But the commission said that privacy considerations were outside the scope of its authority over mergers.
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