Two consumer groups today asked the Federal Trade Commission to block Google?s $750 million deal to buy AdMob, a mobile advertising company, on anti-trust grounds.
In addition, the groups said, the proposed acquisition raises privacy concerns that the Commission must address.
In a joint letter to the FTC, Consumer Watchdog and the Center for Digital Democracy (CDD) said Google is simply buying its way to dominance in the mobile advertising market, diminishing competition to the detriment of consumers.
"The mobile sector is the next frontier of the digital revolution. Without vigorous competition and strong privacy guarantees this vital and growing segment of the online economy will be stifled," wrote John M. Simpson, consumer advocate at Consumer Watchdog and CDD Executive Director Jeffery A. Chester. "Consumers will face higher prices, less innovation and fewer choices. The FTC should conduct the appropriate investigation, block the proposed Google/AdMob deal, and also address the privacy issues."
Last week Google said the FTC has made a so-called "second request" for additional information about the deal indicating the commission is scrutinizing the proposal in great detail.
Besides the anti-trust issues, the letter from the two non-partisan, non-profit groups said, a combined Google/AdMob raises substantial privacy concerns. Both AdMob and Google gather tremendous amounts of data about consumers? online behavior, including their location. AdMob, for example, targets consumers using a wide range of methods, including behavioral, ethnicity, age and gender, and education. In addition to its extensive mobile ad apparatus, Google also provides mobile advertising and data driven analytical services through its DoubleClick subsidiary. The consolidation of AdMob into Google would provide significant amounts of data for tracking, profiling and targeting U.S. mobile consumers.
"Permitting the expansion of mobile advertising through the combination of these two market leaders without requiring privacy guarantees poses a serious threat to consumers," the letter said. It noted that earlier this year several consumer groups, including CDD, petitioned the FTC to specifically protect consumer privacy on mobile phones, especially involving mobile advertising.
Initially Google was able to obtain its dominance in online search advertising largely because of innovative efforts. It then moved into display advertising through the acquisition of DoubleClick. When the FTC approved that acquisition, the Commission said it would watch developments in Internet advertising closely. Since that deal was approved, the online and mobile ad markets have evolved substantially, with Google becoming more dominant in the Internet ad market.
"The proposed Google/AdMob deal offers the FTC an opportunity to check Google?s increasingly anticompetitive behavior,? Simpson said. ?This deal is yet one more example of Google attempting to eliminate a threat to its power." "The FTC must protect competition and personal privacy in the key mobile sector," noted Chester.
The Center for Digital Democracy is a nonprofit Washington, DC-based group focused on the digital marketplace and the public interest.
Consumer Watchdog, formerly the Foundation for Taxpayer and Consumer Rights is a nonprofit, nonpartisan consumer advocacy organization with offices in Washington, DC and Santa Monica, Ca.