Are Google-DoubleClick Privacy Concerns Legitimate?

The Stock Markets Channel, July 16, 2008

With a market share of more than 50% and listings on both Nasdaq and LSE, search-engine giant, Google, is the most frequently used search engine on the web, offering clients seemingly endless options with regard to products and services. After a period of negotiation and wading through extensive red-tape, Google formally acquired internet ad serving company, DoubleClick, with no restrictions, in March 2008 for $3.1 billion.

Although the merger is now a done-deal, some concerns have recently been raised with regard to privacy of the massive compilation of personal data that the merged companies are entrusted with. Leading the posse is Rep. Joe Barton, the lead Republican serving on the U.S. House of Representative Energy and Commerce Committee. He reportedly raised his concerns in a letter to Eric Schmidt, Google’s CEO and Chairman, in May this year.

Analysts are of the opinion that the real concern in the Google-DoubleClick merger is not so much that people’s personal data will be compromised, but that in its zeal to protect personal data, the government will become involved in determining how companies should store and utilize their data. The fact is that the merger of Google and DoubleClick has placed both companies, not only under close government scrutiny, but also in the public spotlight, leaving them little room to act irresponsibly, especially with regard to privacy concerns. Google has earned a reputation for sound business practices, as has DoubleClick. Neither company would want to risk tarnishing their reputations and opening themselves up to legal action being taken against them.

Daniel Ballon, Ph.D., of the Pacific Research Institute (PRI) has pointed out that Google’s competitors have contributed a significant amount of campaign money to Barton, and therefore his motives for questioning the merger could be personal, rather than out of legitimate privacy concerns. Sonia Arrison, a senior fellow at PRI, agrees with her colleague, adding that the government should not be called upon to set regulations to deal with what they perceive to be a potential problem. Setting up regulations could actually create problems, where there were none in the first place.

It would also seem that the lines between privacy and antitrust issues have become blurred. Ballon has stressed that these two have nothing to do with each other and should be viewed completely separately. As with any merger, antitrust issues and concerns were thoroughly addressed before the merger was approved. The Federal Communications Commission (FCC) would not have let the merger go forward, with no restrictions, had it not been satisfied that antitrust laws were not being violated. Although privacy issues deserve attention, they should not hinder a merger going forward.

The bottom line is that there is no legitimate reason to believe that Google and DoubleClick will abandon the sound business practices that form their foundation, and therefore, there is little danger of personal data being misused.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

Scroll to Top