Google’s Double Click Hearings
Senate hearings were held in late September regarding search engine Google.com’s intention to acquire the Double Click internet advertising system. Other major internet-involved companies have opposed the acquisition based upon the potential for Google to monopolize online advertising, and concerns have also been raised about the privacy of internet users. Wisconsin senator and Senate Judiciary Committee chairman Herb Kohl was responsible for initiating the senate hearings. According to senate.gov, representatives of Google, Microsoft, The Progress and Freedom Foundation, Electronic Privacy Information Center (EPIC), and Precursor LLC attended these hearings.
As indicated by the hearings transcript provided on the Senate website, committee chairman Herb Kohl introduced the hearings, pointing out that online advertising is a seventeen billion dollar/year industry and the consolidation of internet marketing companies through mergers creates “profound consequences” for internet users and retailers. He went on to describe the major roles of Google and Double Click on the internet, suggesting that “barriers” to the entry of new competitors could be created by such a merger, and warning of the potential consequences upon privacy generated by the combination of two companies possessing large quantities of user data. He expressed disagreement with those who claim that privacy is outside the jurisdiction of antitrust regulation, saying that such laws were not created only for the protection of “consumers’ pocketbooks.”
Senators Orrin Hatch and Patrick Leahy also made statements at the hearings. Hatch pointed out two major questions which are important to the issue, regarding Google and Double Click’s ambiguous status as competitors, and the need to better inform consumers of privacy risks posed when they click on online advertisements and use search engines. Leahy spoke of the need for website publishers to receive competitive rates for advertisements appearing on their sites, as well as the need to prevent online advertisers from having to pay “artificially high prices” because of mergers. He called for data which is personally identifiable to be erased by Google and Double Click when there is no longer a “legitimate” use for it.
Following their statements, business and organization representatives spoke at the hearings. Google’s representative highlighted the benefits of Google’s existing online advertising network to website owners, bloggers, and charitable organizations, while emphasizing Google’s commitment to privacy. He pointed out the difference between Google’s focus on text-based advertisements and Double Click graphical display ads, arguing that they should be considered “complementary” businesses. Microsoft’s representative disagreed, claiming that Google controls the majority of online advertising already, and would receive 80% of internet ad spending if it acquires Double Click. He claimed that both companies already hold the two largest internet user databases, and spoke of Microsoft’s efforts to promote privacy. A senior fellow from the Progress & Freedom Foundation defended Google’s arguments, while EPIC and Precursor representatives spoke in opposition to the merger.
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