BRUSSELS, Belgium - European antitrust regulators approved Google's $3.1 billion acquisition of DoubleClick on Tuesday, and the deal has been closed.
The European Commission approved the deal without conditions, three weeks before the April 2 deadline.
"We are thrilled that our acquisition of DoubleClick has closed," Google CEO Eric Schmidt said. "With DoubleClick, Google now has the leading display-ad platform, which will enable us to rapidly bring to market advances in technology and infrastructure that will dramatically improve the effectiveness, measurability and performance of digital media for publishers, advertisers and agencies."
According to the European Commission's announcement, the deal's approval was based on several factors.
The commission said its in-depth market investigation found that Google and DoubleClick were not exerting major competitive constraints on each other's activities and therefore could not be considered competitors.
Even if DoubleClick could become an effective competitor in online intermediation services, the commission said, it is likely that other competitors would continue to exert sufficient competitive pressure after the merger. The commission concluded that Google's elimination of DoubleClick as a potential competitor would not have an adverse impact on competition in the market.
The European Commission said it also analyzed the potential effects of non-horizontal relationships between Google and DoubleClick, looking into concerns raised by third parties during the market investigation. These relationships concern DoubleClick's market position in ad serving, where Google, by controlling DoubleClick's tools, supposedly could raise the cost of ad serving for rival intermediaries, and Google's market position in search advertising and online ad intermediation services, where Google supposedly could have required purchasers of search-ad space or intermediation to also purchase DoubleClick's tools.
The commission found that the combined entity would not be able to engage in strategies aimed at marginalizing Google's competitors, mainly because of the presence of credible ad-serving alternatives offered by vertically integrated companies such as Microsoft, Yahoo! and AOL. The market investigation also found that the combined 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.
Google's primary competitor, Microsoft, and privacy groups had hoped that the European Commission and U.S. antitrust regulators would condemn the acquisition, but the commission's sanction was the deal's final significant regulatory obstacle.
The Federal Trade Commission gave the acquisition its blessing in December 2007 after finding no evidence that it would damage competition. The decision was based on U.S. regulators' backing up the claim that Google and DoubleClick were not direct competitors and that markets inside online advertising would develop swiftly.
In November 2007, the European Commission agreed to take a closer look at the proposed acquisition.
Given the differences between how U.S. and European regulators assess acquisitions, several antitrust experts thought Google could have encountered difficulties in Europe.
"Opponents of the merger felt U.S. and European policymakers must reform the antitrust process to reflect the realities of the digital-market era, where competition, data collection and content creation are seamlessly intertwined," the Center for Digital Democracy said on Tuesday. "In today's digital marketplace, the company that controls the most data about consumers and has the global reach to connect to them raises both anticompetitive and privacy concerns. An antiquated and piecemeal antitrust approach fails to protect citizens, consumers and competition."
The Center for Digital Democracy said the merger could aid Microsoft in its goal of acquiring Yahoo! in an effort to encourage online-advertising capabilities.
"Instead of ensuring competition, [the European Commission] and the FTC have literally paved the way for the emergence of a global digital duopoly over online advertising," the Center for Digital Democracy said.
