• by Wendy Davis  @wendyndavis, November 20, 2007

Two high-ranking senators Monday told the Federal Trade Commission they were concerned that Google's planned $3.1 billion acquisition of DoubleClick carries "profound and potentially far-reaching" implications for the Internet ad market, and "raises fundamental consumer privacy concerns."

In a letter to the FTC, Senators Herb Kohl, chairman of the antitrust subcommittee, and Orrin Hatch, the high-ranking Republican on the committee, urged the agency not to approve the deal unless a "comprehensive investigation" shows it won't harm competition.

Google downplayed those concerns in a statement. "We have already worked with the FTC to address each of the questions raised in this letter, and we remain confident that the FTC will conclude that this deal is good for consumers, advertisers and website publishers," the company stated.

Google also stated it believes that the FTC isn't evaluating the deal's potential impact on privacy, but that the company nonetheless "is committed to protecting our users' privacy and has taken a number of industry-leading steps to do so." FTC Commissioner Jon Leibowitz recently indicated that the agency is more focused on the antitrust issues raised by the deal than privacy implications.

While legislators don't have the power to approve or nix a deal, they often weigh in with recommendations to agencies. Here, even though the Kohl-Hatch letter doesn't advocate blocking the acquisition outright, some consumer advocates who oppose the deal are encouraged by the move. "We're very pleased," says Jeff Chester, founder and executive director of the Center for Digital Democracy. "It gives critics of the merger some increased political heft to make our case at the highest level."

The Center for Digital Democracy, along with the U.S. Public Interest Research Group and Electronic Privacy Information Center, are calling for restrictions limiting how a combined Google/DoubleClick entity could use and collect data as conditions of the deal.

The Kohl-Hatch letter focuses on Google's AdSense program--which involves sending contextual ads to other publishers' Web sites--and whether that competes with DoubleClick's ad-serving business for display ads. They urge the FTC to delve into "whether contextual and display advertising are interchangeable and substitutable," among other issues.

FTC approval could be a moot point if European authorities decline to okay the deal. Last week, the EU's antitrust body extended its probe, saying that its initial investigation raised concerns that the merger could harm competition. The companies will not merge unless the deal is approved in both Europe and the United States.

Separately, a dozen Republican Congress members recently called for hearings into whether the merger would hurt consumers' privacy.