• by Wendy Davis  @wendyndavis, February 1, 2008

European antitrust regulators scrutinizing Google's pending $3.1 billion merger with DoubleClick have drafted objections to the deal, but haven't yet decided whether to officially lodge them with Google, according to a new report by investment research firm Stifel Nicolaus

European Commissioner Nellie Kroes, head of antitrust enforcement, is expected to decide this month whether to formally object to the deal, the report said.

But even if Kroes does file objections, Stifel Nicolaus predicted that the authorities will not outright block the merger, but might impose "conditions that could make business tougher for Google."

In the United States, the Federal Trade Commission cleared the deal without imposing any conditions by a 4-1 vote late last year. But the merger won't go through unless European authorities also give their approval.

Google said in a statement that its buyout of DoubleClick will not pose a competitive threat. "This is still an ongoing investigation but we do not believe the transaction raises any competition concerns: Google and DoubleClick are not competitors; current competition among firms in the marketplace is vigorous; and publishers and advertisers can easily move across providers of online services," Google stated. "We hope the EC will come to the same conclusions as the FTC and clear the deal without any conditions."

The European Union's antitrust body, the European Commission, decided last November to extend its probe of the deal. At the time, the body said its initial investigation "indicated that the proposed merger would raise competition concerns in the markets for intermediation and ad serving in online advertising."

In the last decade, the European authorities have only conducted extended reviews in 128 cases, marking less than 4% of the mergers it's evaluated--but have blocked 12 of those outright and imposed conditions in 63, according to Stifel Nicolaus.