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Why the FTC Will Likely Block the Google-DoubleClick Merger

My detailed analysis over the last several weeks leads me to believe that the FTC is likely to block the Google-DoubleClick merger because it will enable Google to dominate online advertising and dramatically increase the opportunity for market collusion and price manipulation in the market for consumer click data, ad-performance tools, ad-brokering and ad-exchanges.

Antitrust is fact-specific and evidence-driven. To understand the true antitrust outlook for a merger one needs to become familiar with the core facts of the case. To date, media and investment coverage of this merger has been remarkably superficial.

  • The executive summary and my new 35-page white paper: "Googleopoly: the Google-DoubleClick Anti-Competitive Case" can be found at Googleopoly.net. An audio file of my conference call on this merger outlook will also be on Googleopoly.net. The analysis and conclusions are driven by pages and pages of facts and evidence.
    • The purpose of the paper is to present the detailed case theory, argumentation and evidence of why the merger is anti-competitive and harms consumers, content providers and advertisers.
    • The paper:
      • Defines the market;
      • Explains why Google-DoubleClick are competitors;
      • Explains why startups, Yahoo and Microsoft can't compete with Google in search;
      • Spotlights the four anti-competitive network effects of the merger; and
      • Shows how the merger harms consumers, content providers and advertisers.

I see three big takeaways from my white paper.

First, the more people learn about this merger the more concern they will develop.

  • The trend line of concern and focus will only increase.
  • The facts and evidence are plentiful and compelling for anyone who delves below the surface coverage of this merger.

Second, most do not appreciate how extraordinarily concentrated key parts of the Internet have become.

  • To equal Google-DoubleClick's level of market concentration in the intermediary online advertising market, one single financial services company would have to own:
    • The top 15 Wall Street banks/asset managers;
    • ~60% of the hedge fund and private equity industries;
    • The New York and London Stock Exchanges;
    • The two leading providers of financial analytical tools: Bloomberg and Factset;
    • Two of the three national providers of credit profiles: Experian and Equifax; and
    • ~60% of the Federal Reserve's and U.S. Census Bureau's raw market and consumer data.

Third, I took the time to do this detailed analysis because as a leading "precursor," I strongly believe that Google will soon displace Microsoft as the lead focus of the antitrust community going forward.

In closing, I expect to be attacked personally for my analysis and conclusions here, just like I was attacked by Bernie Ebbers and WorldCom as "the idiot Washington analyst" for having the audacity to be the only analyst in the country willing to predict, and stick to my guns, that the government would block the WorldCom Sprint merger.

  • I am confident that the facts, evidence and analysis in this case ultimately will prove my assessment of the Google-DoubleClick merger correct.
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