Google's acquisition of online advertising firm DoubleClick will come under further scrutiny after the Australian Competition and Consumer Commission - Australia's competition regulator - revealed it has launched an inquiry into the deal.The Australian Competition and Consumer Commission (ACCC) stated on its website that it has launched an informal review into the US$3.1 billion purchase and has written to industry participants asking for comments on how the takeover would impact the Australian online advertising market.
Section 50 of Australia's Trade Practices Act 1974 prohibits mergers and acquisitions which would, or would be likely to, substantially lessen competition in the Australian market and with both Google and DoubleClick already active in Australia, the regulator is seeking comment on the extent to which the two companies compete in the local online advertising market. Furthermore the regulatory body will examine whether a merged company would result in inflated prices, and whether it would have the capacity to cause rival search engines or advertisers to cease operations in the country.
Google spokesman Rob Shilkin said online advertising was a highly competitive field in Australia, which has seen a large number of participants and new entrants. He told news agency, Reuters:
"DoubleClick and Google provide very different services to each other and we've provided information to the ACCC in the normal course."
The DoubleClick deal has already fallen foul of regulatory bodies in the U.S from the Federal Trade Commission and has been subject to a congressional inquiry as well as coming under scrutiny by European regulators. Furthermore, industry rivals including Microsoft and AT&T have requested U.S antitrust officials to look closely at the takeover, claiming that Google could gain too much control over online advertising.
The ACCC commenced the review under the Merger Review Process guidelines in August, with the closing date for submissions from interested parties being cited as 11th September 2007. The regulatory body propose to announce their findings into the inquiry on 16th October 2007.
Google has already locked horns with the Australian regulator after it took the search giant to court in a separate case, alleging that sponsored advertising links carried by Google's website amounted to misleading and deceptive conduct. In that case, the ACCC claimed Google had not done enough to distinguish between sponsored advertising links and organic results, asserting they were deceptive. According to the Australian Associated Press, however, the judge described the ACCC's claim as 'opaque and repetitious' and granted Google's request that the ACCC file a summary of its case and adjourned the hearing until October 4th 2007.
