## Facts

- Google Inc. agreed to acquire DoubleClick Inc. in 2007 for approximately $3.1 billion.
- The Federal Trade Commission (FTC) opened an investigation to assess the acquisition’s competitive effects in online advertising and related services.
- Google operated a major internet search engine and was the dominant provider of sponsored search advertising.
- DoubleClick provided third-party ad-serving services: on behalf of website publishers, it helped select and deliver display advertisements to appear on publishers’ webpages.
- DoubleClick was a leading third-party ad server, but the FTC found it did not possess market power and faced significant, increasing competition.
- At the time, Google did not own or operate a functioning third-party ad-server product, though it was developing an ad server that was not yet operational.
- During the investigation, commenters argued that combining Google and DoubleClick data could harm consumer privacy, and urged the FTC to block or condition the transaction on privacy grounds.
- On December 20, 2007, the FTC voted 4–1 to close the investigation and not challenge the transaction; Commissioner Pamela Jones Harbour issued a dissent.

## Issues

1. Whether Google’s acquisition of DoubleClick was likely to substantially lessen competition in any relevant market, in violation of Section 7 of the Clayton Act.
2. Whether the merger could harm competition under non-horizontal or “conglomerate” theories (including foreclosure or exclusion of rivals) based on the combination of Google’s search advertising position with DoubleClick’s ad-serving technology.
3. Whether Google’s development of an in-house ad server made a potential-competition theory plausible—i.e., whether the merger would remove likely, significant future competition Google would otherwise provide in third-party ad serving.
4. Whether consumer privacy concerns, standing alone and not tied to a demonstrated competitive effect, could justify blocking the merger or imposing merger conditions.

## Decision

- The FTC closed its investigation and declined to challenge the acquisition.
- The Commission concluded the transaction was unlikely to substantially lessen competition in any relevant antitrust market.
- The Commission found Google and DoubleClick were not direct competitors in a relevant market, weakening a standard horizontal-merger theory.
- The Commission determined DoubleClick faced meaningful competition and lacked market power in third-party ad serving.
- The Commission found the record did not support blocking the merger based on speculative non-horizontal harm (such as exclusion or impairment of rivals), given the market setting and existing alternatives.
- The Commission declined to use merger enforcement to address privacy concerns that were not connected to an antitrust violation, stating that merger review is aimed at transactions that harm competition and that the FTC lacked authority to block or condition the deal on non-antitrust grounds.
- Commissioner Harbour dissented, arguing the Commission gave insufficient weight to network effects, data concentration, and privacy as a dimension of competition.

## Legal Principles

- Section 7 of the Clayton Act prohibits mergers and acquisitions where the effect “may be substantially to lessen competition, or to tend to create a monopoly.”
- Merger analysis centers on competitive effects in properly defined relevant markets; where the parties do not compete directly, the agency focuses on other plausible theories of harm supported by evidence.
- A potential-competition theory requires evidence that, absent the merger, the acquiring firm likely would enter the market in a way that would materially constrain the target or improve competitive conditions.
- Non-horizontal theories (including exclusion, foreclosure, or raising rivals’ costs) require a showing that the merged firm would have both the ability and incentive to take actions that would likely harm competition, considering available alternatives and competitive constraints.
- Merger remedies and challenges must be tied to preventing harm to competition; concerns not connected to anticompetitive effects are not, by themselves, a basis for merger intervention under federal antitrust law.

## Conclusion

In Google/Double Click, the FTC closed its merger investigation and allowed Google’s acquisition of DoubleClick to proceed, concluding the deal was unlikely to substantially lessen competition because the firms were not direct competitors, DoubleClick lacked market power amid growing competition, and asserted non-horizontal harms were not supported by the record; the Commission also stated it could not block or condition the merger based solely on privacy concerns unrelated to antitrust effects, over a dissent warning about data concentration, network effects, and privacy-related competitive harm.


Google/Double Click, 2007 WL 4624893 (2007)