Apple Deal Helps Google
By Aruna Viswanatha | January 5, 2010 7:33 pm

Google’s antitrust lawyers got some good news today, when word broke that Apple Inc. is buying mobile advertising company Quattro Wireless.

Apple’s entry into the mobile advertising market comes two months after Google’s $750 million bid for rival mobile advertising platform AdMob. Critics of the deal have said it would substantially decrease competition in the nascent mobile advertising market and put Google on the path to having a monopoly in that industry.

The entry of another large rival into the field could help Google’s claim that the deal does not raise antitrust concerns.

In a post on it’s public policy blog today, Google product manager Paul Feng argued that Apple’s purchase of Quattro proved that mobile advertising is a competitive industry.

“[W]ith more investments and acquisitions in the space, including from established players like Apple and Google, that’s a sign that vigorous growth and competition will continue,” Feng writes.

The Federal Trade Commission extended its review of Google’s purchase of AdMob last month, a sign that it had some concerns about the deal.

Google’s critics remain skeptical the Apple-Quattro deal will alter the landscape for Google. “It really doesn’t change things because the core fact of Google being the dominant search engine buying the number one in applications advertising isn’t changed,” said Scott Cleland, a consultant and vocal Google critic who has urged the FTC to block the deal.

Critics have also raised concerns that extend beyond a traditional antitrust analysis. Two watchdog groups, The Center for Digital Democracy and Consumer Watchdog argued that the deal raises concerns about consumer privacy that arise from combining the Google’s vast data mines with those of AdMob.

Even though privacy issues are not often considered by the FTC when it reviews a merger, Chairman Jon Leibowitz has raised the issue in reviewing a previous Google deal.

After an eight-month investigation in 2007, the Commission approved Google’s purchase of DoubleClick, an online display advertising platform (as opposed to Google’s text-based advertising).  In a separate statement then Commissioner Leibowitz called attention to the privacy concerns the deal, and the industry, raised.

The “rampant tracking of our online conduct…raises critical issues about the sufficiency of companies’ disclosures…and the security and confidentiality of the massive collection of sensitive personal data,” he said at the time.

Google’s critics raise that precedent in arguing against this deal. “The Obama FTC has shown a willingness to use [its authority] to protect competition but also to protect consumers,” Jeff Chester, the director of the Center for Digital Democracy, said in a interview.

Google also launched its own Nexus One phone today, highlighting the potential vertical concerns of its AdMob acquisition. “The FTC may be concerned that Google will control access to key mobile advertising technology or services needed by competing smart-phone platforms,” said former FTC assistant director and current Howrey partner Michael Cowie, in an interview.

Google has continued to say it doesn’t anticipate any regulatory issues with the deal.

updated 1/6/09 at 9:47 am


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