A €2 billion takeover by US-based search engine giant Google, of online advertising firm Double Click, is likely to be approved unconditionally by European antitrust regulators, according to three people close to the case.
Normally in such cases, the European Commission sends the given firms a list of formal objections with at least eight weeks' notice before a deadline in order to give the companies enough time to respond.
Business newswires are reporting that because the commission has not yet done so, and thus far in its history has never blocked a merger without first having submitted a statement of objections, the commission will likely approve the Google-Double Click deal without caveats.
A Double Click spokesperson would not comment on the news, saying the news was "still all speculation and rumour".
The deal would combine Google's dominance in search-related advertising (the ads that appear at the side of a Google search results page) with the display advertising services (the colourful ads at the sides or top of webpages) of DoubleClick, a field in which it too is dominant.
Google controls 70% of the global search market, while Double Click has cornered 80% of the online display advertising market.
The search engine giant stores massive amounts of data tracking people's search histories. The merger would enable the company to combine this data with Double Click's vast storehouse of data on people's websurfing activities.
However, the takeover of Double Click has raised substantial opposition amongst digital privacy advocates and experts on the internet.
Data privacy concerns
The European Consumers' Association, BEUC, warned the commission of data privacy worries in a letter sent last December.
"Google/Double Click will be a data collection colossus that combines information about consumers that Google collects through its search engine with the tracking data that Double Click collects about users as they surf the web.
"Post-merger, Google will have the ability and incentive to engage in significantly more intrusive user tracking and profiling than exists today," says the letter.
At a round-table discussion on the merger in Brussels on Wednesday (5 March) organised by the conservative think-tank, the Centre for the New Europe, Marco Peirani, a director of Altroconsumo, the Italian consumers' group, said: "a Google Double Click merger would be detrimental for consumer interests in Europe.
"The legal framework for consumer privacy and protection is not strong enough when faced with the massive aggregation of private information the Google Double Click merger will deliver."
Wayne Arnold of the Institute of Practitioners in Advertising (IPA) and a founder of boutique digital ad agency Profero said during the round-table discussion: "Google is increasingly becoming the dominant player in the digital advertising space in Europe. If the Double Click acquisition goes through, this will provide Google with unrivalled access to consumer data and a foothold in the display media space -- an area in which until now they have been relatively weak."
The next big thing in online advertising is behavioural targeting, said Mr Arnold. This is a technique whereby advertisers increase the effectiveness of their campaigns by using data collected from someone's web-browsing behaviour – that is to say, what sites they have been to and what things they have searched for.
The advertiser then uses this information to deliver adverts tailored to the perceived interests of the websurfer. The The Double Click deal will make Google "suddenly the dominant player in behavourial targeting," said Mr Arnold.
Behavioural targeting has increasingly come under attack from data privacy advocates, and last November, the practice came under scrutiny by the Article 29 Working Party, the EU's data protection group.
The Article 29 Working Party's move was prompted by the furor over social networking site Facebook's use of the technology. Thousands of the website's users signed a petition organised by left-of-centre US campaign group MoveOn.org to demand the company use an 'opt-in' box that could be checked before Facebook could use its behavioural targeting software, called Beacon, which not only served up user-targeted adverts but also told all a user's other contacts on Facebook what the user had purchased.
The petition was ultimately successful, with Facebook backing down and 23-year-old founder Mark Zuckerberg publicly apologising to users. Market analysts at the time said the incident had significantly harmed the company's relationship with a number advertisers.
Similar concerns about the Google takeover of Double Click were raised in the US ahead of the US Federal Trade Commission's (FTC) approval of the deal.
Frank Watson, of the blog Search Engine Watch, noted: "[Google] have search analytics, content publishing resources both with AdSense and the newly added YouTube, and now an ad serving platform with video and rich media expertise -- but also tracking abilities for the source of the page views, and more importantly the ability to monitor behaviour across all sources of traffic."
His comments were repeated in a submission to the FTC by the Centre for Digital Democracy, an digital civil liberties advocacy organisation.
"Double Click and Google now has access to the bulk of the world's online behaviour," they quoted him as saying.
The takeover won approval from the FTC in December.