Google-DoubleClick Acquisition to Get Congressional Hearing

House Subcommittee Looks Into Merger

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NEW YORK ( -- Google's planned DoubleClick acquisition is garnering attention in Washington this week, where a congressional hearing has been called to closely examine the merger, with the lead congressman citing both consumer-privacy concerns and anticompetitive issues.
The chairman of the House Energy and Commerce Committee called the Goggle-DoubleClick merger a
The chairman of the House Energy and Commerce Committee called the Goggle-DoubleClick merger a

The chairman of the House Subcommittee on Commerce, Trade and Consumer Protection, Bobby L. Rush (D-Ill.), opened an investigation into the acquisition and announced he would hold a hearing on it.

'Time bomb'
John D. Dingell (D-Mich.), the chairman of the House Energy and Commerce Committee, of which Mr. Rush's subcommittee is a part, praised the move, calling the merger a "virtual privacy time bomb."

The subcommittee has jurisdiction over the Federal Trade Commission, which already has issued a second request to look into the planned acquisition. The congressional hearing would likely commence in the fall, once Congress returns from its August recess.

While no specific event or news was named as the reasoning behind the subcommittee's decision, its members have long been concerned with privacy issues in all areas, from data security to online privacy. And Google has been the subject recently of several negative privacy reports, including one out of the European Union, which complained Google retains user information too long. Yesterday, Google announced via its corporate blog that it would shorten the lifetime of its cookies -- those tools that collect users' data -- to two years.

Critical report
Adding to the speculation that the Google-DoubleClick merger might face higher hurdles than originally thought, Precursor analyst Scott Cleland released a separate report this week suggesting the merger would "dominate online advertising and dramatically increase the opportunity for market collusion and price manipulation."

Of course, Mr. Cleland is also the chairman of, a nonprofit consortium funded by the telecom, cable and wireless companies to advocate against net-neutrality legislation. Google and would be on opposite sides of the net-neutrality debate.

Earlier this week, Yahoo's $680 million acquisition of the 80% of Right Media it didn't already own was completed. That acquisition was part of a raft of buys by major players in the online-advertising space occurring shortly after Google's April 13 decision to acquire DoubleClick for $3.1 billion. WPP Group announced a planned acquisition of online-advertising company 24/7 Real Media for $649 million and Microsoft announced a planned acquisition of aQuantive, which owns Atlas, Drive PM and Avenue A/ Razorfish, for $6 billion.

"Online advertising is a relatively new industry, and policymakers understandably have questions about the acquisitions that Google, Microsoft, Yahoo, AOL and other companies are making in this space. We are confident that our acquisition of DoubleClick will benefit consumers, improve privacy, and promote competition, and that it will ultimately be approved by the Federal Trade Commission," a Google spokesman said.
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