The Google-Doubleclick Merger, the FTC, and the Future of Transactional Privacy Inquiries in the United States

Abstract

On April 13, 2007, Google, the world's largest search provider, announced that it would acquire DoubleClick, the largest existing online advertising company, in a cash merger. Within days, Google's $3.1 billion acquisition of DoubleClick was challenged by Microsoft and others on privacy and antitrust grounds. On April 20, the Electronic Privacy Information Center (EPIC) filed a complaint with the Federal Trade Commission (FTC) requesting that the Agency: (1) issue an injunction to prevent the Google-DoubleClick merger from proceeding, and (2) conduct an investigation regarding the circumstances of the merger. The FTC recently concluded an initial investigation into whether the Google-DoubleClick merger would promote unfair and deceptive trade practices substantially likely to harm consumers and not outweighed by countervailing benefits to consumers. Rather than clearing the transaction, however, the FTC requested that the parties submit significant volumes of additional information to allow the Agency to perform a more thorough investigation and analysis of the anticompetitive effects of a proposed merger. Despite the FTC's clear antitrust authority, however, the bulk of the EPIC complaint, and therefore presumably the thrust of the investigation, addresses privacy issues and not antitrust or competition concerns. This paper argues that the FTC has no authority to address the privacy concerns raised by the Google-DoubleClick merger. Section II will examine the FTC's authority both to review mergers and to investigate privacy concerns under § 5 of the FTC Act. Part III will review the two § 5 cases relied upon by EPIC to support its argument that the FTC has the authority to review the Google-DoubleClick merger. This section will argue that the present merger differs in significant ways from prior instances in which the FTC relied upon § 5 of the FTC Act. Finally, Part III will analyze EPIC's unfair trade practices claims under the § 5 standard, concluding that it is not likely that the merger will result in substantial harm to consumers not reasonably avoidable and not outweighed by countervailing benefits. Part IV will look to the future of the Google-DoubleClick merger in light of both U.S. and international pressures, concluding that judicial intervention is likely regardless of the decision of the FTC. Finally, in order to prevent the necessity of judicial intervention in the future, Part IV recommends the passage of legislation providing the FTC or another federal agency with the authority to require that companies collecting large volumes of nonpublic consumer data put comprehensive and effective data protection provisions into place or face sanction.