KEY POINTS:
The European Union has deepened its probe into Google's planned purchase of rival DoubleClick to make sure a decision made either way can withstand a court challenge
The European Commission last week opened an in-depth probe of the US$3.1 billion ($4.13 billion) transaction, delaying until April a deadline for its decision on the merger of two leading companies in the complex and lucrative market for online ads.
Google chief executive Eric Schmidt called the move disappointing, and said he wanted to avoid further delay.
The hold-up is not only due to the EU, because United States antitrust authorities are mulling over the deal as well. Depending on which way they go, the decisions will anger either Google or big-league critics such as Microsoft MSFT. O and Yahoo!, potentially leading to court action.
The EU executive's decision to deepen the probe prompted criticism in the US, where some say Brussels seems to prefer protecting competitors over promoting competition.
A US academic, Keith Hylton of Boston University law school, said recent experience showed Brussels was "more responsive to competitors' complaints" than US agencies because the European Commission "doesn't have to worry as much about being rejected in court".
The commission can kill deals, while US agencies need the backing of a judge. Nonetheless, the commission has learned the hard way that it is not immune from court action.
"If the commission had cleared the Google deal in Phase 1, I suspect some of the parties may have gone to the EU courts in Luxembourg. I don't think they had much of a choice on this one," said a lawyer for an opponent of the deal.
Microsoft, Yahoo! and advertisers have raised big objections to the deal.
Minutes after the commission announcement, Yahoo! Europe managing director Tony Coppel applauded the move, saying it "provides the thorough examination of the proposed merger that Yahoo! believes is needed".
The additional 90 business days for an in-depth probe may give the commission the time it needs to gather enough data to face down a court challenge by the losing side.
When it comes to mergers - as opposed to abuse of dominance cases such as those recently involving Microsoft or chipmaker Intel - the EU and US have learned to co-operate since a bitter split in 2001 when Washington approved GE's buy of Honeywell only to see Brussels reject it.
"The commission works very closely with the United States on merger cases where we're both examining the same deal," said Jonathan Todd, a spokesman for the European Commission.
Brussels-based antitrust lawyer John Boyce said it was a matter of sensible co-operation for the European Commission to delay a decision on an all-US deal while it is considered by the US Federal Trade Commission.
"If the European Commission had cleared this before the United States completed its work, the EU would not be respecting the fact that the FTC is the better placed agency to front the investigation," he said, adding that Brussels must ultimately make its own decision.
- Reuters
