Leaked Microsoft Docs: DoubleClick Deal Monopolistic
That question is counterbalanced by another: whether the perceived threat of another emerging potential monopoly will get the EC riled up enough to block the merger outright.
Microsoft, of course, hopes that its arguments will resonate more clearly with the EC than they did with the FTC.
"Googles acquisition of DoubleClick would result in Google controlling a virtual monopoly share of the ad-serving capacity currently available to third-party publishers and thus would raise barriers to entry/competition to insurmountable levels (and require competitors to confront a rival that is dominant in every component of the pipeline and that can manipulate network effects to make entry even more difficult)," the documents state.
In its best "Help, I'm drowning" voice, the company warns that even the all powerful Microsoft has been blocked from Google's main market search advertising.
"One need look no further than search advertising to see that despite Microsofts size, technical prowess, and strong incentives, it has been unable to compete effectively with Google in search and that Google's lead in search advertising has continued to grow because of network efforts."
In its pitch to the FTC's commissioners, Microsoft didn't just shoot for an "all or nothing" approach, however. If the merger isn't blocked outright, the company has several fallback positions it recommends, none of which were chosen by the FTC, by the way.
Here Microsoft's documents echo some of the same concerns as European consumer groups that argue the combination of the two online advertising giants, along with their huge databases of users' behaviors, would not only threaten users' privacy, but also drive up advertising rates for European companies, and thus artificially raise consumer prices.
One of Microsoft's recommendations would be to force Google to divest itself of key ad publishing tools it is acquiring with DoubleClick.
"Unless and until Google's competitors are able to obtain access to competitively neutral and unbiased ad-serving tools like those currently provided by DoubleClick, the ability of Google's rivals to create viable alternative pipelines will be very difficult, if possible at all," Microsoft's analysis document states at one point.
Under other recommendations, in the remedies document, Microsoft calls for "open access for competing ad networks," as well as prohibiting Google from "discriminating in favor of DoubleClick in terms of the access that Google affords ad-serving tool vendors to its networks."
These arguments did not sway the FTC. However, the EC has proven it takes a different view of competition than U.S. governmental bodies, so the decision could go either way.
Microsoft, meanwhile, has not been frugal about trying to compete head-to-head with Google and DoubleClick. Last summer, it spent $6 billion on ad giant aQuantive. As one sign of some success, Microsoft also this month inked a deal valued at $500 million with cable giant Viacom, formerly a DoubleClick customer, to serve ads on its content Web sites and to sell left-over online advertising inventory.
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