Privacy Groups Ramp Up Google-DoubleClick Attacks

December 19, 2007 0

Groups also call on agency to consider privacy as well as competitive issues…

“In the seemingly waning days of the U.S. government’s antitrust review of the Google-DoubleClick union, consumer groups are lodging a last-minute plea: do not forget about privacy…”

Google’s proposed purchase of DoubleClick has intensified privacy concerns across the globe, and most recently in Europe, where privacy issues have begun to overshadow antitrust concerns.

Two technology interest groups on Tuesday reiterated their call for a privacy investigation into the proposed merger of “Google/DoubleClick,” and threatened to sue the Federal Trade Commission Chairman ‘Deborah Platt Majoras’ for failing to recuse herself from the pending review of Google Inc.’s planned $3.1 billion acquisition of online advertising company and her involvement with a law firm representing DoubleClick’s European interests.

“In the U.S., the deal has been opposed by several groups, including the Electronic Privacy Information Center and the Center for Digital Democracy.”

“The commission will be failing consumers and, frankly, democracy if it does not specifically ensure that privacy is addressed in the merger,” Jeff Chester, founder and executive director of the Center for Digital Democracy, said during a conference call with reporters.

The groups have also called on the FTC to block the deal unless the companies agree to protect the privacy of online users. But the FTC has said it is reviewing the competitive issues related to the merger, not specifically the privacy issues.

Speaking in a joint telephone press briefing, the heads of the Electronic Privacy Information Center (EPIC) and the Center for Digital Democracy (CDD) said the commissioners are duty-bound to look at privacy concerns in their review of the merger between the two leaders in their respective sectors of online advertising.

“After their call for Chairman Majoras to recuse herself from the inquiry because of a potential conflict of interest was rejected, the groups are now exploring legal options to force the recusal.”

Google announced in April that it would purchase online ad provider DoubleClick for $3.1 billion in cash. In May, the FTC announced that it would conduct an antitrust review of the deal, and the agency’s conclusions on the matter are expected soon.

EPIC, CDD and the U.S. Public Interest Research Group submitted a petition to the FTC in April calling for a full review of the proposed merger. In the complaint, the groups suggest that the two companies do not put forth sufficient effort to protect the data they collect, and that the merger could be injurious to consumers. Therefore, they argue, the language of the FTC Act that gives the agency a mandate to prevent “unfair or deceptive acts or practices” also requires it to insert significant privacy safeguards into approval of the merger.

The directors of those groups, who predicted a decision by the Federal Trade Commission is “imminent,” voiced concern that the FTC may overlook the potential privacy implications raised by the combined user massive data stores of the two prominent companies.

Their predictions about the FTC’s stance are hardly theoretical. In November, Democratic commissioner Jon Leibowitz told participants at a public workshop on online behavioral advertising that “our analysis of the merger has got to be about competition and potential competition. It can not be about privacy per se.”

But EPIC and CDD insist that is not the case. They argue the FTC has ample legal authority–and moreover, they contend, is obligated–to address privacy issues in its merger review and to impose conditions, if necessary, to ensure the united company does not imperil consumer privacy.

To Google — the argument that does not hold truth. Adam Kovacevich, a spokesman for the company, said in a statement that while Google is committed to protecting its customers’ privacy, the Commission has already said that privacy will not be a factor in the review.

Kovacevich was referring to a comment by Commissioner Leibowitz, who said that the review “cannot be about privacy, per se.”

“What Google is claiming, and I’m concerned some commissioners may embrace, is the notion that there are not specific privacy concerns intrinsic to the Google-DoubleClick merger, which frankly is absurd on the face of it, when you are merging the two number ones in search and advertising with vast data for targeting all across the globe,” Chester said.

Earlier on Tuesday, Monique Goyens, head of the Bureau Européen des Unions de Consommateurs (BEUC), Europe’s leading consumer advocacy group, sent a letter to the European Commission underscoring her organization’s concerns about the proposed deal.

“The Google/DoubleClick merger would harm consumer welfare by creating a structure that almost certainly will be less respectful of user privacy,” Goyens said. “A combined Google/DoubleClick will be a data collection colossus that combines information about consumers that Google collects through its search engine with the tracking data that DoubleClick collects about users as they surf the Web.”

The groups said they are also un-amused by Federal Trade Commission Chairman Majoras’s dismissal last week of accusations that her participation in the review process posed a clear conflict of interest.

Majoras used to work for Jones Day and, Majoras’ husband is currently a non-equity partner at the firm, and Jones Day stated at a now-deleted corporate Web page that it was representing DoubleClick “on the international and U.S. antitrust and competition law aspects of its planned $3.1 billion acquisition by Google Inc.”

“Though, DoubleClick and the FTC have persistently said that Jones Day is not involved in the U.S. government’s consideration of the matter, and has never appeared before the FTC on behalf of DoubleClick.”

A Computerworld search of the Jones Day Web site for information about DoubleClick comes up empty; however a Google cache page of the Web site from Nov. 7, 2007, gives this information:

“Jones Day is advising DoubleClick Inc., the digital marketing technology provider, on the international and U.S. antitrust and competition law aspects of its planned $3.1 billion acquisition by Google Inc. The proposed acquisition will combine DoubleClick’s expertise in ad management technology with Google’s internet search and content platform. The transaction is currently under review by the U.S. Federal Trade Commission (FTC) and European Commission.”

FTC spokespeople later said Jones Day was representing DoubleClick before the European Commission only and had not yet “appeared before” U.S. regulators. Majoras later released a statement saying she would not recuse herself because her husband “is in no way connected to the matter, nor are any of the parties to the matter otherwise currently his clients.”

The law firm could not be reached for comment at deadline.

Marc Rotenberg, executive director of EPIC, said that the groups are moving quickly to mount a legal challenge against Majoras’ decision not to recuse. They are currently trying to decide the best venue in which to seek a judicial review, on what law they would base their claim and whether they should file the challenge immediately, or, given that a decision from the FTC on the merger could come as early as this week, whether they should wait until after the announcement is made.

Irrespective of the recusal issue, CDD’s Chester said that the groups would call on Congress to intervene should the FTC approve the merger without significant privacy safeguards.

“Dealing with new media mergers in this part of the century, you cannot separate the business of online communications, data collection and privacy,” Chester said.

“They are intrinsically intertwined to its core.” “Truly in my mind, it is one of the most important media mergers ever.”

Google declined to comment directly on the privacy groups’ latest activities but sent CNET News.com the following statement: “This acquisition is good for consumers, advertisers and website publishers and we continue to be confident that it will be approved.”