Google has come under fire this week as its takeover bid for Doubleclick, an online advertising and click marketing provider, has been criticised for potentially creating a marketing monster that may not only monopolise the market and limit customer choice but could potentially threaten the privacy of consumers.
Earlier this week the Associated Press (AP) reported that a European consumer group had called for an investigation into the acquisition, stating that the buy-out damaged European privacy rights and limited consumer choices.
Brussels based consumer group BEUC had appealed to the European Commission and other European authorities to look into privacy concerns relating to the deal, although there had yet to be any request submitted from the two companies for EU approval.
The fear seems to be that with two huge databases at their disposal, any merger could create an advertising empire that would result in a monopoly.
The BEUC’s main concern however seems to be that as the world’s biggest search engine, Google’s massive database of consumer activity and the search habits of the general public would be being exploited for commercial gain.
Google has been under close scrutiny recently by the EU due to its current privacy policies and the matter of whether or not the search site stores internet users search information for too long. In an attempt to soothe EU concerns, the company did offer to cut the time it retains user data from the current 24 months to 18 months, stating that this was less time than most other search engines.
Cornelia Kutterer, BEUC’s senior legal adviser told the AP that "They have so far complementary databases with private data. If they merge them, this could lead to unmatched databases of profiles. If they can combine them, this could lead to a violation of user privacy rights."
The AP also reported that in a letter to data privacy and consumer rights regulators, the BUEC wrote: "Never before has one single company had the market and technological power to collect and exploit so much information about what a user does on the internet. The unprecedented and unmatched databases of user profiles appear to be in clear violation of users privacy rights."
The deal itself is thought to be worth around US$3.1 billion (2.29 billion) and was announced in April of this year. Very quickly some industry experts began to question why Google would pay so much for a company previously estimated to be worth US$2 billion (1.47 million).
Speaking to Business Week, Dave Morgan, chairman of TACODA said that DoubleClick’s value to Google could be that despite its thriving banner, video and display advertising, Google does not have the relationships with the major online publishers and ad agencies that DoubleClick has.
The newspaper reported that DoubleClick currently has associations with Time Warner, Sports Illustrated and Viacom’s MTV Networks whereas Google has existed thus far on tiny text ads relating to searches for relatively small businesses.