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Google, DoubleClick Merger Raises Concerns – Pacific Research Institute

Google, DoubleClick Merger Raises Concerns

Analysts say the real worry is that government will become involved in deciding how companies store and use people’s data.

Barton raised his concerns in a May 21 letter to Google Chief Executive Eric Schmidt. Barton wrote, “It is critical that Google’s and DoubleClick’s policies and procedures for handling this information be transparent and that every effort be made to protect consumers’ data.”

Google’s $3.1 billion acquisition of one-time rival DoubleClick was approved with no restrictions in March 2008. DoubleClick provides Internet advertising services.

Personal Vendetta Alleged

Some experts say Barton’s aggressive after-the-fact questioning of the merger is nothing more than a personal vendetta.

Daniel Ballon, Ph.D., a fellow in technology studies at the San Francisco-based Pacific Research Institute (PRI), says Barton’s disagreement with the merger stems from his relationship with Google’s competitors and a feeling of being snubbed by the company.

“He has an issue with Google that is very political and personal,” said Ballon. “This is nothing but a stunt on his part, and I would not take it seriously. There are people who are legitimately concerned about privacy, but he is not one of them. He has gotten lots of campaign money from Google’s competitors and is upset that Google never followed through with their invitation for him to visit their campus.”

Regarding the argument over whether the merger creates privacy and antitrust issues, Ballon thinks the difference between the two needs to be clearly understood.

“Privacy and antitrust have nothing to do with each other,” Ballon said. “It is important that these two issues remain completely separate, just as the Federal Communications Commission [FCC] concluded in their decision to let the merger go forward. That doesn’t mean there should not be some discussion about online privacy, but it shouldn’t be tied in to consideration of whether a merger should go forward.”

‘Under Close Scrutiny’
Industry experts believe the attention placed on the merger means Google and DoubleClick will not act irresponsibly with users’ information because they know they are operating under a microscope.

“Google and DoubleClick know they are under close scrutiny,” said Sonia Arrison, a senior fellow at PRI. “And they know the government is going to come down hard on them if something happens. So they are going to avoid privacy problems at all costs because they don’t want to deal with regulators.

“There are some serious incentives for the companies to act super cautiously on their own,” Arrison added. “Imagine all the lobbying fees, attorney’s fees to file briefs, and the bad publicity they would receive if they slip up. This is not a new issue for them. Look at how well they did with Google Health. This shows how attuned they are to the issues of privacy.”

Regulations Unnecessary

Ballon and Arrison expressed greater concern about possible government regulation of how data are stored and used. Many in the industry believe government intrusion would be more problematic for computer users in the long run.

“You don’t want the government to get involved in how companies like Google store their data,” said Arrison. “Look at how they mange data at the Department of Motor Vehicles across the country. I don’t think privacy will be a problem with Google’s merger with DoubleClick, so we don’t need government involvement.

“The government shouldn’t set up regulations [merely] on the idea of a potential problem. Regulation always creates unintended consequences. If there is no problem in the first place, it should be left alone,” Arrison added.

Ballon agrees, saying too much government regulation could lead to seizure of information down the line.

“Ironically, my concern is not what Google will do with the information,” Ballon said. “My concern is what the government will do with it if they get their hands on it. The last thing I want is the government to get their hands on how companies store the data, because later they can say ‘we want the actual data.’

“The more regulated these companies are, the more they fear punishment at the regulatory level by the government,” Ballon continued. “The company will then be at the mercy of the government. We, as consumers, should all be concerned and knowledgeable about what these companies are doing with our information, but the last thing you want is the government setting up a regulatory framework for these sorts of things.”

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.

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