On Thursday, the Senate Judiciary Committee held a hearing on the proposed Google-DoubleClick merger. According to CNN:

Online search firm Google took its fight to acquire a key online advertising firm to Congress today, telling members its proposed acquisition to buy DoubleClick would not be inconsistent with US antitrust laws.

However, US software company Microsoft reiterated its complaint that the proposed merger would create an online advertising giant that would stifle competition in the young but large and growing industry.

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In a Senate Judiciary Committee hearing today, however, the two companies made their arguments in a more public setting, and allowed members of the committee to express fears about the possible erosion of data privacy that could come about through the merger.

David Drummond, Google’s senior vice president of corporate development, said the acquisition of DoubleClick will promote competition, and said no antitrust issues are at stake here because the two companies do not compete.

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Drummond said Google has expertise in text ads primarily, while DoubleClick has focused on display ads. In addition, he said DoubleClick does not buy or sell ads, and only provides technology allowing advertisers to deliver ads and analyse their effectiveness.

He also said the company would remain committed to protecting consumer privacy. Groups supporting consumer privacy have come out against the merger, citing fears that the merger would make it too easy for the combined company to monitor consumers.

At the same hearing today, Brad Smith, senior vice president of Microsoft, warned the online advertising industry is a critical market for technology, and is already a 27 bln usd market that will likely double in the next four years.

Ensuring competition in this market is critical, he said, adding that it is ‘absolutely clear’ to Microsoft that the merger poses serious questions.

Specifically, he said there are only a small number of companies that act as intermediaries between sites and advertisers, and said the merger would give Google a dominant position in the industry.

You can read the testimony here.

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