Proposed online-advertising company purchases by Google and others are keeping FTC acquisition reviewers busy.
New York — The Federal Trade Commission will review three of the major internet ad acquisitions of late, according to a person with knowledge of the deals.
The FTC is conducting antitrust reviews of Microsoft Corp.’s $6 billion bid for aQuantive Inc. and Yahoo Inc.’s $680 million deal for the 80% of closely held ad-exchange operator Right Media Inc. it didn’t already own, lawyers close to these deals said. The FTC already is investigating Google Inc.’s $3.1 billion bid for DoubleClick Inc.
The FTC or the Department of Justice reviews virtually every major transaction, as required by the 1976 Hart-Scott-Rodino Antitrust Improvements Act, which seeks to ensure that mergers do not lessen competition or lead to higher prices for consumers.
In some cases, they issue a “second request” for more information — meaning they will take a much deeper look into the acquisition. It is unclear whether the FTC has sent either Yahoo or Microsoft a second request.
The agency already has issued a second request to Google in response to its $3.1 billion bid for DoubleClick, including extensive document requests and interviews and is likely to take several months to complete.
Normal Procedure
As part of the normal regulatory review process, the FTC has opened a routine, 30-day review period following the filing we submitted on the aQuantive acquisition, said Microsoft spokesperson Jack Evans in an e-mailed statement.
It is normal procedure for any acquisition of this size to go through Hart-Scott-Rodino review, a Yahoo spokesman said. “As we have stated previously, Yahoo views the acquisition of Right Media as an important step in building an effective, open digital-advertising and -publishing ecosystem.”
Some 95% of such reviews are cleared within 30 days, said Deborah Platt Majoras, Chairman of the Federal Trade Commission, in a February 2006 announcement. In the remaining cases, the FTC issues a “second request” seeking additional documents deemed necessary to evaluate proposed deals under antitrust laws.
Internet ad firm Real Media today said that the Hart-Scott-Rodino waiting period expired this week without a request for additional information from antitrust regulators, clearing the way for WPP Group’s planned acquisition of the company to proceed.
During the past month, there have been several major acquisition announcements in the online-advertising marketplace, said the joint letter from the American Association of Advertising Agencies and the Association of National Advertisers.
These mergers, if approved, certainly would change the online-advertising marketplace. As such, those proposed combinations deserve careful scrutiny. It is essential to ensure that none of these combinations restrict competition in the internet-advertising marketplace.
The letter continued: “Advertising on the internet is one of the fastest-growing sectors of marketplace promotion; therefore, ensuring its competitiveness is critical for all participants.”
AOL did not immediately respond to a request for information about the status of its acquisition of ADTECH AG, another Internet ad firm.
In evaluating all the acquisitions, the commission will need to determine the markets in which the companies are operating.
It is not clear whether the FTC will consider only online, third-party display advertising or the much broader and bigger advertising market. FTC hearings are closed to the public and often require laborious information gathering on behalf of the companies making the acquisitions.
Between 1998 and 2005, “the majority of the investigations in which the FTC issued a second request resulted in a merger challenge, consent order, or modification to the transaction, suggesting that the FTC generally issues second requests only when there is a strong possibility that some aspect of a transaction would violate the antitrust laws,” said Majoras last year.
During those eight years, 44% to 78% of companies asked for additional information faced some type of enforcement action.
In May, Don Harrison, senior corporate counsel for Google, said in an e-mailed statement, “We are confident that upon further review the FTC will conclude that this acquisition poses no risk to competition and should be approved.”