Scott Cleland, an analyst at the Washington, D.C. based telecom research group Prescursor has published a 35 page paper “Googleopoly: the Google-DoubleClick Anti-Competitive Case”. The paper argues that the US Federal Trade Commission will block Google’s $3.5 billion acquisition of DoubleClick on the basis that it will allow “Google to dominate online advertising and dramatically increase the opportunity for market collusion and price manipulation in the market for consumer click data, ad-performance tools, ad-brokering and ad-exchanges.”
Those interested can read the full report here. The stand out portion of Cleland’s report is how he describes Google dominance of the online advertising market post acquisition:
To equal Google-DoubleClick’s level of market concentration in the intermediary online advertising market, one single financial services company would have to own:
- The top 15 Wall Street banks/asset managers;
- ~60% of the hedge fund and private equity industries;
- The New York and London Stock Exchanges;
- The two leading providers of financial analytical tools: Bloomberg and Factset;
- Two of the three national providers of credit profiles: Experian and Equifax; and
- ~60% of the Federal Reserve’s and U.S. Census Bureau’s raw market and consumer data.
Cleland’s analysis of Google’s acquisition of DoubleClick though needs some perspective. Cleland is also an anti-net neutrality activist who has backed the position of the existing telecommunications players in testimony to a Congressional hearing; simply as with any analyst or lobbyist, he makes a case that is usually in line with the concerns or beliefs of the industry that backs him. The only real question with this report: who wants Google’s DoubleClick acquisition to fail this badly?
The FTC has acted against anti-competitive behavior in the tech industry before (most notably with Microsoft), however the FTC under the Bush Administration has become far more laissez faire towards business practices than it was in the past. It won’t be all clear sailing for Google, but given recent history it would be surprising if the FTC did block Google’s DoubleClick acquisition.