Fast Company

FTC Prepares Litigation Team for Possible Blocking of the Google-AdMob Deal

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The Wall Street Journal hears from people familiar with the matter that the Federal Trade Commission has already assembled a litigation team to investigate Google's recent (and very pricey, at $750 million) attempt to acquire mobile ad leader AdMob. The concern is that with Google's entrenched dominance of search ads on both desktop and mobile platforms, the incorporation of AdMob would create an impossibly powerful entity in which no competitors could survive.

So far, the FTC has taken several preliminary steps: they've asked AdMob's competitors to testify as to the threat such a merger would pose; they've briefed Congress regarding their concern about the deal; and they're continually meeting with Google lawyers, who are trying to convince the FTC that the merger is acceptable.

Senator Herb Kohl of Wisconsin has stepped forward to encourage investigation, saying the deal "raises important competition issues." Further, he writes that "It is therefore of vital importance to be wary of any transaction that would create undue market dominance of search- or application-based advertising on mobile devices such as smartphones." Despite his rather formal wording, we've got some of the same concerns--read Kit's excellent think-piece on the possible negative effects of such a deal for more info. In short, there are more concerns than simply antitrust--us consumers have to worry about exactly why Google wants AdMob, notably Google's hunger for ever more user data.

But the FTC certainly doesn't have a clean-cut case. After all, Google isn't exactly absorbing a competitor--Google works in mobile search ads, and AdMob puts ads within apps. And Apple, a company which does, remember, maintain strict control over the world's largest app repository, recently acquired Quattro Wireless, a company slightly smaller than but very similar to AdMob.

Even more, the market is so young that nobody really knows what the field will look like next year, let alone in five years--and if the FTC blocks this deal, there are a couple possibilities that are no better than a Google/AdMob-domination. Apple and Quattro could secure a monopoly, or Google could simply create a mobile app advertising system in-house. It's not an easy answer--but it is a major decision for the FTC.

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