Last updated: December 29, 2009 3:44 pm

Google’s AdMob move in the spotlight

 
Google

Consumer groups want regulators to block the deal

Google’s spreading reach in internet advertising triggered fresh scrutiny of its privacy practices this week, as US consumer groups used its proposed $750m acquisition of mobile advertising company AdMob to throw a new spotlight on the issue.

The move on Monday, by Consumer Watchdog and Center for Digital Democracy, echoes a similar campaign at the time of Google’s acquisition of online display advertising group DoubleClick in 2007.

Though it failed to prevent the DoubleClick deal, that campaign succeeded in drawing wider attention to the practice of behavioural targeting, or the use of data about individuals’ online behaviour to send them tailored ads, and contributed to the Federal Trade Commission’s adoption of self-regulatory guidelines in the area.

In a joint letter to the FTC, the two consumer groups complained that the AdMob acquisition would give Google “a massive amount of consumer data to exploit for its benefit”. They argued that AdMob “provides inadequate notice and little ability to opt out of its data collection and targets children 13 and over”, and called on the regulators to block the deal.

AdMob has emerged quickly as a leader in the business of distributing adverts to mobile handsets. It targets the ads based on data it collects about a user’s online behaviour, demographic profile and geographic location.

Google revealed last week that the FTC had made a second request for information about the proposed AdMob acquisition, signalling a longer, more in-depth investigation.

It described the deeper level of scrutiny as “one consequence of Google’s success”, and said it was still “confident” the deal would be cleared. The mobile advertising business is “highly competitive with more than a dozen mobile ad networks”, it added.

The FTC said two years ago that it could not take privacy issues into account when deciding whether or not to block an acquisition like that of DoubleClick, since its merger authority only extends to competition issues.

It added that it had studied the risk that less competition would damage “non-price” factors such as privacy before eventually deciding to clear the deal.

Even if the privacy arguments do not affect the eventual outcome of the AdMob merger review, they could draw Google into a bigger public debate about its use of data as its moves into new corners of the advertising market.

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