Google's AdMob acquisition raises antitrust and privacy concerns

Posted by Alisa Zykova on December 29, 2009 at 8:07 AM

Two advocacy groups have urged the U.S. Federal Trade Commission (FTC) to prohibit Google Inc.'s planned US$750 million acquisition of mobile advertising firm AdMob Inc., BusinessWeek reported yesterday. The Center for Digital Democracy and Consumer Watchdog issued a statement mentioning antitrust concerns and privacy issues that the sale incited, pointing out that it might "substantially lessen competition in the increasingly important mobile advertising market." according to Reuters.

Search giant Google, Inc. intends to improve sales of adverts featured on applications on mobile phones, Reuters reported. The resulting purchase of AdMob is presumed to spawn the biggest mobile advertising company that would occupy 30 percent to 40 percent of the market, Karsten Weide, an analyst from California's Interactive Data Corp., told BusinessWeek.

Google spokesman Adam Kovacevich pointed out that there are more than a dozen mobile advertising networks, and because none of them have mobile ad revenue it makes it hard to evaluate market share, the Wall Street Journal reported. He added that Microsoft Corp., Yahoo Inc. and AOL Inc. have also embarked on similar deals in the past two years. He also added that Google is "confident that the FTC will conclude that the rapidly growing mobile advertising space will remain highly competitive after this deal closes."

The two consumer groups said that both AdMob and Google collect information on consumers' online activity, targeting audiences based on age, gender or education. The WSJ's article stated that the mixture of these factors may offer "significant amount of data for tracking, profiling and targeting U.S. mobile consumers," according to the groups' statement.

"Google has a track record of providing strong privacy protections and tools, like the new Dashboard, for users to take control or opt out of data collection, and it will apply the same approach to privacy following this acquisition," Kovacevich said.

Reuters reported that Google creates most of its revenue through sales of ads that appear alongside Web search engine results, which in 2008 amounted to around US$22 billion. The company has previously been criticised by the U.S. government over its DoubleClick Inc. deal in 2007 and a search deal with Yahoo in 2008, according to BusinessWeek.