Investigation underway on Google DoubleClick deal

The US Federal Trade Commission (FTC) has started an official investigation into Google's planned US$3.1 billion purchase of DoubleClick.

The planned merger has prompted a flurry of similar deals in the online advertising market, and Microsoft has called for a formal investigation on the ground of competition.

Privacy groups have also been up in arms, and the Electronic Privacy Information Center (Epic) filed an official complaint to the FTC over the issue last month.

Don Harrison, a senior corporate counsel for Google, told The New York Times: "We are confident that, on further review, the FTC will conclude that this acquisition poses no risk to competition and should be approved."

The US Department of Justice and the FTC share responsibility for antitrust issues in the US, while the FTC traditionally handles privacy concerns.

"We think it is very important that the FTC is taking a look at the Google-DoubleClick deal," said Marc Rotenberg, executive director at Epic.

The group's filing cited an FTC investigation into DoubleClick in 2001 which found that the company had sold on user information to third parties in violation of its privacy policy.

Google's habit of recording the IP addresses of search requests was also condemned.

The Epic filing states: "Google's and DoubleClick's conduct ... has injured consumers throughout the US by invading their privacy; storing information obtained through the retention of users' search terms in ways and for purposes other than those consented to or relied upon by such consumers; causing them to believe, falsely, that their online activities would remain anonymous; and undermining their ability to avail themselves of the privacy protections promised by online companies.

"Absent injunctive relief by the FTC [means that] Google is likely to continue to injure consumers and harm the public interest."

However, privacy is not the primary concern of any antitrust investigation which must always investigate primarily on commercial grounds.