FTC Clears Google-AdMob Deal
May 21, 2010
| 1:15 PM
The FTC Friday announced it has approved Google's $750 million acquisition of mobile ad provider AdMob, despite acknowledging antitrust issues related to the deal.
The commission voted 5-0 to close its investigation of the deal, saying in a statement that it has concluded "that it is unlikely to harm competition in the emerging market for mobile advertising networks."
The commission did acknowledge that the merger of the two leading mobile ad providers did raise "serious antitrust issues," but added that those concerns were overshadowed by Apple's entry into the market with its purchase of Quattro Wireless, which it has used to launch its own iAd mobile ad service.
"In addition, Apple can leverage its close relationships with application developers and users, its access to a large amount of proprietary user data, and its ownership of iPhone software development tools and control over the iPhone developers' license agreement," the FTC statement said.
"Though we have determined not to take action today, the commission will continue to monitor the mobile marketplace to ensure a competitive environment and to protect the interests of consumers," the commission added.
In a blog post Friday, Google Vice President of Product Management Susan Wojcicki praised the FTC's move as "great news for the mobile advertising ecosystem as a whole. This was reflected in the widespread industry support for our acquisition." She said Google would be working in the "coming weeks" to close the deal.
Critics, however, have argued that together the two firms will control 70 percent of the growing mobile ad market and that combining the leading player, AdMob, with the number two player, Google, a dominant force in computer-based online advertising, will make it difficult for new players to enter the market.
Noting reports that FTC staff had recommended blocking the deal, Scott Cleland, chairman of the coalition NETCompetition.org, which is made up of major telecom and wireless firms such as AT&T, Sprint and Verizon, said the FTC's reliance on Apple to provide competition in this market is flawed given that it will likely only serve the high-end market.
"The FTC just ceded most of the mobile ad market to Google," Cleland argued, adding that "It's a bad day for competition and consumers."
A bipartisan group of House Energy and Commerce Committee members have raised concerns about the deal. ""The need for thorough review is particularly pressing given Google's dominant position in search advertising including mobile search advertising and its growing influence over other forms of online advertising," they wrote last month in a letter to Energy and Commerce Chairman Henry Waxman, D-Calif., urging him to ask the FTC to brief the committee on the Google-AdMob deal.
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