Microsoft Urges Antitrust Officials to Scuttle DoubleClick Deal

Look who's bitching and moaning about tech bullies now

Microsoft, a veteran defendant of epic antitrust battles in the United States and Europe, is urging antitrust officials to consider scuttling Google’s plan to buy DoubleClick, an online advertising company.

Microsoft contends that the $3.1 billion deal, announced last Friday, would hurt competition in the fast-growing market for advertising on the Web and raise questions about how much personal information would be collected by Google, which is already a dominant player in online advertising.

In an interview today, Bradford L. Smith, Microsoft’s general counsel, said that the purchase of DoubleClick by Google would “combine the two largest distributors of online advertising” and thus “substantially reduce competition in the advertising market on the Web.”

Google dismissed Microsoft’s assertions. “We’ve studied this closely, and their claims, as stated, are not true,” Eric E. Schmidt, chief executive of Google, said in an interview last night.

Google and DoubleClick, according to Mr. Smith, would be in a position to “observe and capture consumer information on an unprecedented scale.”

Google tracks the interests and preferences among the millions of people who use its search engine. DoubleClick is the leader among companies that specialize in placing, or “serving,” the graphical and video ads that appear on Web sites. Ad-serving networks like DoubleClick place tiny programs on personal computers, called cookies, that monitor where an individual user goes online.

Microsoft was joined today by AT&T, a company that traces its lineage to the Ma Bell monopoly that was broken up in the mid-1980s. “We think antitrust authorities should take a hard look at this deal and the implications,” said Jim Cicconi, senior executive vice president for external affairs at AT&T. “If any one company gets a hammerlock on the online advertising space, as Google seems to be trying to do, that is worrisome.”

Microsoft was one the companies, along with Yahoo and Time Warner, that lost out to Google in the bidding for DoubleClick. Mr. Cicconi said that AT&T, by contrast, would be affected by a Google-DoubleClick combination because AT&T distributes services over the Internet like digital television, known as IPTV.

“For many of these new Web services, it could be that the advertising-supported model is the predominant business model,” he said. “The danger here is that Google could be in a position to pick winners and losers.”

This is not the first time that Microsoft, the biggest winner of the personal computer era, and Google, the emerging Internet powerhouse, have been on opposite sides of an anticompetitive claim. Early last year, Google complained to regulators that the design of Microsoft’s Internet Explorer browser steered users to Microsoft’s MSN search engine instead of rival search offerings from Google and Yahoo.

After reviewing the matter, the Justice Department said last May that Microsoft’s browser allowed users a fairly easy way to switch to non-Microsoft search services. So Microsoft’s product design, the department said, did not pose an anticompetitive threat. In that case, Google did talk to antitrust officials in Europe and the United States about its concerns.

Mr. Smith said Microsoft had not yet approached antitrust officials in the United States about its worries about Google’s purchase of DoubleClick.

http://www.nytimes.com/2007/04/15/technology/16softcnd.html?ref=business