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WASHINGTON - The US Federal Trade Commission has approved Google's US$3.1 billion purchase of DoubleClick, saying the much-criticised deal did not pose a threat to competition in internet advertising.
The deal, which combines Google's dominance in pay-per-click internet advertising with DoubleClick's market-leading position in flashier display ads, still faces scrutiny from European antitrust officials, who opened a four-month review in mid-November.
In a 4-1 vote, the FTC decided to end its eight-month investigation of the transaction. "After carefully reviewing the evidence, we have concluded that Google's proposed acquisition of DoubleClick is unlikely to substantially lessen competition," the commission's majority wrote in a statement.
Google said it hoped the European Commission would reach the same conclusion as the FTC. "This acquisition poses no risk to competition and will benefit consumers," Chief Executive Eric Schmidt said in a statement.
Critics of the combination, first announced in April, had said it could give Google too much control over online advertising and threaten internet users' privacy.
In its statement, the FTC said it had also investigated the consumer privacy issue, but concluded that the evidence did not show the deal would pose a problem.
"We want to be clear, however, that we will closely watch these markets and, should Google engage in unlawful tying or other anticompetitive conduct, the commission intends to act quickly," it said.
A privacy group that opposed the deal said the FTC failed to protect Americans who use the internet.
"By permitting Google to combine the personal details, gleaned from our searches online and YouTube downloads, with the vast repository of information collected by DoubleClick, the FTC has sanctioned the creation of a new digital data colossus," said Jeff Chester of the Center for Digital Democracy.
Parallel with the merger's approval, the FTC proposed behavioural marketing principles to guide self-regulation in that evolving business.
Behavioral advertising involves tracking a consumer's activities online, including Web searches and sites visited, to target advertisements to individual interests.
The dissenting FTC vote in the Google-DoubleClick decision came from Pamela Jones Harbour, an independent who said the acquisition might lessen competition.
"If the commission closes its investigation at this time, without imposing any conditions on the merger," she wrote, "neither the competition nor the privacy interests of consumers will have been adequately addressed."
Commissioner Jon Leibowitz, a Democrat, voted with the majority, but in a separate opinion, he cited serious privacy and competition issues.
The merger, which Australia and Brazil have already approved, is part of a rapid consolidation within the internet advertising industry.
In recent months, Microsoft Corp bought aQuantive for US$6 billion, Yahoo Inc bought BlueLithium for US$300 million and Time Warner Inc's AOL unit bought Tacoda for an undisclosed amount.
The Center for Digital Democracy unsuccessfully asked FTC Chairman Deborah Platt Majoras to recuse herself from considering the deal because her husband works for a law firm representing DoubleClick before European regulators.
Google shares were up US$6.12, or nearly 1 per cent, at US$683.49 in afternoon Nasdaq trade.
- REUTERS
