Google, Consumer Groups Fire Opening Salvos in EU Talks

Testy exchanges punctuated yesterday's debate over the relevance of privacy concerns in the European Commission's (EC) review of the proposed Google-DoubleClick merger. At yesterday's meeting in Brussels, consumer advocates appealed to European lawmakers and regulators to examine privacy concerns when evaluating Google's acquisition of the online advertising provider. The complaints came in spite of the Commission's previous statement that the review would only consider the impact on competition. "People %26#91;are%26#93; trying to take a privacy case and shoehorn it into a competition law review," Google's global privacy counsel Pete Fleischer said in response to attacks from U.S. and European privacy advocates, according to a Reuters report. Despite the criticism, Google expects the EC to follow the lead of the U.S. Federal Trade Commission's -- which approved the merger -- in basing its decision solely on the issue of competition. "We need a common set of principles to guide the entire industry," Google spokesman Ben Novick told InternetNews.com. "It would be wrong and even counterproductive to single out one company." Neelie Kroes, an EU competition commissioner, had said in October that privacy would not factor into the Commission's review. However, that statement has not deterred the merger's opponents from pressing regulators to consider the privacy implications of the deal. Its critics, led by the BEUC, Europe's largest consumer group, have argued that because the combined company would have a far greater trove of consumer data at its disposal that the issues of privacy and competition were necessarily intertwined. Rebecca Arbogast, analyst at Stifel, Nicolaus and Co., said that for privacy advocates, the best outcome of yesterday's meeting would likely be to put political pressure on the EU's Directorate General of Competition, a regulatory body loosely parallel to the U.S. Department of Justice. Yesterday's session was a meeting of the European Parliament, rather than the EC itself, to discuss the privacy issue as it relates to online advertising in general. The Parliament does not rule on competition reviews of mergers. In that context, yesterday's meeting was similar to the "town hall" meeting on behavior-targeted online advertising held in fall by the FTC. That meeting examined privacy issues on an industry-wide basis, rather than just looking at Google and DoubleClick. Nevertheless, some groups at the FTC meeting seized the opportunity to challenge the Google/DoubleClick deal. One of those groups was the Electronic Privacy Information Center (EPIC), whose executive director, Marc Rotenberg, also spoke during yesterday's meeting. The EC review is the last major hurdle facing the $3.1 billion acquisition. In December, the U.S. Federal Trade Commission blessed the merger with unconditional approval by a 4-1 vote. The approving majority determined that privacy concerns were "not unique to Google and DoubleClick." As a companion to the ruling, the FTC issued a general list of principles for behavioral marketing throughout the industry. In his testimony yesterday, Google's Fleischer tried to frame the privacy discussion as an area of industry-wide concern that should be addressed in a global context. "Privacy practices on the Internet cannot stop or change at borders," he said. "In the area of online advertising, the industry cannot develop one set of self-regulatory principles in Washington and another in Brussels." Fleischer claimed that Google has taken numerous steps to limiting the information that it collects about consumers, including cutting the lifespan of its cookie from 30 years to two years. Yesterday's meeting was the first public discussion of the merger since the EC decided in November to move its review into the more rigorous phase two investigation. Pamela Harbour, the lone dissenting commissioner in the FTC vote, also spoke at the meeting yesterday. Harbour, who articulated her view that the FTC did not sufficiently address the privacy issue in its review of the merger, attended the meeting independently, not as a representative of the FTC. As of now, there are no more public meetings scheduled in Europe that could factor in the EC's decision. The deadline to rule on the merger is April 2.