Related to my last post, the New York Times’ technology blog has an excellent write-up about the case that illustrates just how arbitrary the standards in antitrust merger reviews can be:
Google’s $3.1 billion deal in April to buy DoubleClick set off a wave of advertising acquisitions by Microsoft, Yahoo, AOL and others. All of those deals have been completed, but Google is still waiting while regulators in Washington and Europe consider the antitrust and privacy implications of its proposed combination…
Several consumer groups are opposing the merger because they fear that Google and DoubleClick will have too much information about Internet users. Most observers suggest that although the commission regulates privacy, its opinion of the merger must reflect antitrust issues only. The groups opposing the deal have argued that there are in fact precedents for the commission to take privacy concerns into account. (The Electronic Privacy Information Center, which is against the merger, lists many documents supporting its view here. Google’s take is here.)
In the end, Mr. Lindsay writes that Google may well be forced to accept some limitations on its use of data about Internet users. It may be required in the United States to anonymize data about users after 18 months, something it already agreed to do with European regulators. And there may be some limits imposed on how data from DoubleClick’s ad serving system can be used by Google.
Now, as our own Jim Harper will be the first to tell you, there are reasons for consumers to be concerned about the data-retention policies of large Internet companies, Google included. But if new regulations about online privacy are needed, those regulations should be proposed and debated in Congress. It’s totally inappropriate for government regulators who are supposed to only be reviewing a merger on antitrust grounds to use the review as a pretext to single the company out for special, extra-legal privacy regulations. Whatever problems Google’s privacy policies might have, they’re certainly not attributable to monopoly power on Google’s part: even after the merger Google would have less than a third of the online advertising market.
Unfortunately, the lesson Google is likely to learn from this ordeal is the same one Microsoft learned a decade ago: you can never hire too many lobbyists. Regardless of what the law might say, Washington insiders will find ways to punish successful companies that don’t spend resources cultivating influence in Washington. Is it any wonder that Google has been pouring millions of dollars into a beefed-up Washington presence?