Takes a Convicted Monopolist to Know One …
After years of suffering in the antitrust spotlight, Microsoft is with great zeal refocusing it on the Google-DoubleClick deal, which it claims would give Google control of 80% of the ads served on the Internet. On Monday, the software giant announced the Initiative for Competitive Online Marketplaces, or ICOMP, a campaign to ensure that the digital marketplace remains competitive. Its first principle:
- “Advertisers, Web publishers and consumers all rely on healthy competition in online advertising to fund online innovation and content. Online advertising will continue to serve as the engine that drives the online economy, but only if vibrant competition in this critical sector is preserved.
“Regulators should carefully scrutinize any transactions in the online advertising sector that would create or enhance a dominant market position, substantially reduce existing or future competition, or leave advertisers, online publishers, or consumers with fewer options.”
Lest there be any doubt to which “transaction in the online advertising sector” Microsoft refers in its ICOMP principles, the company released a research paper prepared by the AEI-Brookings Joint Center for Regulatory Studies this week that says Google should not be allowed to purchase DoubleClick for $3.1 billion . It argues that Google and DoubleClick are not, as the search giant claims, complementary businesses working in different parts of the advertising sales and delivery process. They sell advertising in exactly the same way and if you merge the two, you end up with a monstrosity of a company with market power above the federal government’s warning level.
And, as Silicon Alley Insider’s Henry Blodget notes, that’s a compelling argument. “If the Microsoft-funded paper’s most basic premise is correct, the market share of the combined Google-DoubleClick will exceed 50% (52% to be precise)–above the “warning level” for antitrust cases,” Blodget writes. “And Microsoft’s argument, that it’s all just Web advertising, makes more intuitive sense, especially to those who aren’t immersed in this industry. Microsoft is no stranger to getting deals killed by antitrust concerns, and its lobbying efforts here are working. Regardless of the actual legal merits of Google’s position, if any, Microsoft’s argument is more persuasive. If Google had bought DoubleClick three years ago, when it could barely give itself away, the deal would have sailed through. Now, however, it seems that Microsoft may finally win one.”