Panel Debates Google-AdMob Merger
Google's acquisition of mobile advertiser AdMob was put under a microscope Thursday when industry experts debated whether the FTC should block the deal to preserve competition in the growing mobile advertising market.
The FTC is currently examining Google's proposed $750 million purchase of AdMob, which is currently the leading provider of mobile ads followed by Google. Together, they control at least 70 percent of the nascent mobile ad market, according to Jonathan Kanter, a former FTC attorney who now represents players in the Internet advertising market including Microsoft.
Kanter argued, during a Capitol Hill forum on the issue sponsored by arts+labs, that the case includes many of the elements FTC officials look to when considering whether to block a merger such as the No. 2 player buying the No. 1 player in a market and a desire to remove the top player as a competitor instead of a need on the part of Google to obtain some technology it currently lacks.
He added that the FTC has a "long history of challenging" mergers in emerging markets because if one party "gets so far ahead, it's too hard for other people to catch up."
But Glenn Manishin, a lawyer with Duane and Morris, argued that given how small the mobile advertising market is at this point, it's "way too soon to make a judgment." He also disputed Kanter's claim that there are barriers to market entry in the mobile ad market, saying "if you know anything about Web code," it would be simple to enter the mobile ad market.
Berin Szoka, a senior fellow and director of the Center for Internet Freedom at the Progress and Freedom Foundation, argued that he is concerned the FTC might try to block the merger for the wrong reasons such as to make up for its failure to block Google's acquisition of DoubleClick and to address privacy concerns. "My concern here is not so much about Google," but about the precedent the case may set, Szoka said.
"People who push for an antitrust [action] because they don't like what a company does on privacy," such issues "are not in the scope of an antitrust probe," he argued.
But Lillie Coney, the associate director of the Electronic Privacy Information Center, said she believes the FTC should be looking at the privacy implications of such mergers and at the growing Internet advertising market in general because she said much of the revenues in this market are based on the exchange and sale of personal data about Internet users. "We believe there needs to be regulation in this area," Coney said. "They do have the authority to delve into this area especially when" it effects mergers.
Her firm has asked the FTC to investigate Google for violating the privacy rights of its users when it launched its social networking service Buzz earlier this year.
Senate Judiciary Antitrust Subcommittee Chairman Herb Kohl, D-Wis., raised concerns about the measure in a letter last week to the FTC, saying the commission should pay close attention to the deal's impact on the growing mobile ad market and to its privacy implications. "It is my view that this merger raises important competition issues which should be reviewed carefully and with close scrutiny by the Federal Trade Commission," Kohl wrote.
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