Kohl, Concerned About Google-AdMob Deal, Urges ‘Careful’ FTC Review
By Aruna Viswanatha | April 6, 2010 1:19 pm

Google’s proposed purchase of mobile advertising platform AdMob now faces political heat.

Sen. Herb Kohl (D-Wis.) wrote a letter Tuesday to his former staff counsel, Federal Trade Commission Chairman Jon Leibowitz, urging the agency to “carefully” review the merger, which would combine Google’s growing presence in mobile advertising with the largest company that places ads on smart phones.

Leibowitz worked for Kohl from 1989-2000, including a stint as the Democratic staff director on the Senate Judiciary Committee’s antitrust subcommittee when Kohl was the ranking Democrat on the panel. Kohl now chairs that subcommittee.

“Without reaching any conclusion as to whether the Google/AdMob transaction would create such dominance or would cause any substantial harm to competition, I believe it is essential that the FTC scrutinize this deal very closely,” Kohl wrote.

Critics of the deal have complained Google could use its muscle in the online search market to become the dominant player in mobile advertising.

Google has responded that the market has a dozen players, is still developing and is too new for the deal to raise major regulatory issues.

“While we’re continuing to work with the FTC, there is overwhelming evidence that mobile advertising will remain competitive after this deal closes,” Google spokesman Adam Kovacevich said in a statement. “Mobile app advertising is less than two years old, there are more than a dozen mobile ad networks, app developers and advertisers routinely use multiple networks”.

Apple, he pointed out, is also getting into mobile advertising.

The FTC has reportedly asked some parties to sign sworn statements, indicating it has some concerns about the deal.

The review is important, Kohl said, because of the role mobile phones will play in the future. ”Smart phones are a uniquely powerful method for advertisers to reach consumers, because most consumers with smart phones carry them most of the day, and frequently use them to access and search the Internet,” Kohl said.

More Internet searches will be conducted on a smart phone than on the computer in the next five to 10 years, and the smart phone will become a dominant advertising medium, Kohl said, citing industry experts.

“Allowing any one firm to dominate this market could result in higher prices for mobile advertising on the Internet and with respect to smart phone applications, and also could result in lower revenues realized by applications developers,” Kohl said.

Kohl, who chairs the Senate Judiciary Committee’s antitrust subcommittee, also asked the FTC to assess the privacy concerns raised by combining the vast data troves of both companies. “The FTC should assure itself that the deal, if approved, will have sufficient safeguards to protect consumers’ privacy,” Kohl said.

While the agency also handles privacy issues as a function of its consumer protection mandate, it does not usually take privacy into account when reviewing a merger.

Kohl raised similar concerns about Google’s 2007 purchase of online ad platform DoubleClick. The FTC approved that deal without conditions.

Updated at 3:15 to include comment from Google.

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