Thursday, December 27, 2007

Google/Doublick Merger: EPIC Statement

To expand on the FTC's recent approval of the merger between Google and Doubleclick - particularly its privacy implications - I thought this statement by Marc Rotenberg, of the Electronic Privacy Information Center (EPIC), was a worthy post.

Some highlights include:

But the competition at issue here is not simply the development of a product or a service, it concerns the techniques that are used to collect information on American consumers in the Internet advertising industry, whether by text-based advertising, display-based advertising or some combination of the two.

Further, unlike typical merger reviews where the Commission may assume that the market analysis of suppliers and consumers captures all of the relevant parties, the market for Internet-based advertising is different. These companies target individual consumers based on their interests, their activities, even their personal behaviors. The “consumers” for Internet advertisers are web-based publishers. Assuming there is healthy competition, they make choices among competitors for advertising services. But for the consumer whose data is gathered, there is no choice. The market relationship exists between the advertiser and the publisher. It does not include the consumer.


But a majority of the Commissioners chose to ignore the privacy implications ofthe Google-Doubleclick merger and to propose instead the same self-regulatory approachto privacy protection that has repreatedly failed American consumers and could have been put forward whether or not a merger review was also underway.


As Senator Kohl said recently, “The antitrust laws were written more than a century ago out of a concern with the effects of undue concentrations of economic power for our society as a whole, and not just merely their effects on consumers’ pocketbooks. No one concerned with antitrust policy should stand idly by if industry consolidation jeopardizes the vital privacy interests of our citizens so essential to our democracy."

Moreover, in the last several years, the Commission has become increasingly aware of the new risks to American consumers. The FTC’s annual surveys repeatedly find that identity theft is the number one concern of American consumers. But consumers have little understanding of how their personal information is collected, how it is used, or what they might do when problems arise. The reality is that the gap between the risks to consumer privacy and the protections for consumer privacy is growing.


The Federal Trade Commission had an opportunity to establish the necessary safeguards for personal data and competition that could have allowed a global framework to emerge. Instead, the Commission’s failure to act leaves the question of how best to address the privacy and competiton implications of this deal to others.

The Federal Trade Commission is a public agency funded by taxpayer dollars. Its sole purpose is to protect the public interest. It failed to do so today in a case that will have far-reaching implications for the Internet economy and the privacy rights of American consumers.

Click here for the statement in its entirety.

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