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Monday, April 16, 2007

Microsoft Says the Government Must Stop Google

I don't know enough about this market to evaluate the impact of Google's purchase of DoubleClick on competition, i.e. whether there's significant market failure involved here or not, but is Microsoft the best choice to take the lead in complaining about anti-competitive behavior?

After bidding on the purchase itself and losing, it appears Microsoft is so worried about Google that it is colluding with AT&T, AOL and Yahoo to find a way to block Google's purchase through rent-seeking behavior. First step - use their collective power to pressure the government to stop Google from potentially becoming the next Microsoft:

Microsoft Wary of DoubleClick Buyout Software Giant, Other Firms Want Strict Review of Google Deal, by Sam Diaz, Washington Post: Microsoft said yesterday that Google's proposed purchase of Internet advertising company DoubleClick raises antitrust and privacy concerns that deserve careful review by authorities.

Executives at the software giant said they talked over the weekend with AT&T, AOL and Yahoo about similar concerns. Microsoft had bid for DoubleClick but lost to Google.

The $3.1 billion acquisition, announced late Friday, would combine the largest providers of online advertising and create a dominant force, Microsoft said. ...

"By putting together a single company that will control virtually the entire market . . . Google will control the economic fuel of the Internet," said Brad Smith, general counsel for Microsoft.

Microsoft also raised concerns about the privacy of Internet users... DoubleClick ... remembers sites a user visits and serves up relevant ads; Google keeps data about searches conducted on its site.

Smith said Google would have "an unprecedented degree" of personal information about a person's activity on the Internet. ...

Jim Cicconi, executive vice president of external and legislative affairs for AT&T, said ... his company is reviewing the deal. "I don't think AT&T is drawing a conclusion, per se, whether the transaction should or should not happen, but we do have sufficient concern and feel this deserves careful scrutiny from the government," he said. An AOL spokesman declined to comment...

    Posted by on Monday, April 16, 2007 at 12:03 AM in Economics, Market Failure | Permalink  TrackBack (0)  Comments (33)


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