Consumer Advocates Pooh-Pooh Google-AdMob Deal

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google mobile_smallADOTAS – When Google announced its plans to acquire mobile ad network AdMob, we were ready to bow and kiss the ring of the new mobile ad king. Alas, we forgot that maxim about counting your chickens before they hatch.

Last week the Federal Trade Commission (known as the Grinch at Google headquarters) announced it was in need of more information, a “second request,” before it could give a thumbs-up to merger. The FTC had already been in prolonged discussions with Google over the AdMob acquisition, so this move suggests scrutiny has been dialed up in the review.

Google played down the importance of that announcement, but now consumer watchdog groups are piling on the regulatory pressure.

In a letter to FTC Chairman Jon Leibowitz, John M. Simpson, consumer advocate at Consumer Watchdog, and Jeffery A. Chester, executive director for the Center for Digital Democracy, argue that the merger would enable Google to dominate the mobile ad network and discourage competition, as well as put the app monetization process squarely in the hands of Google.

Beside antitrust concerns, the letter warns about consumer privacy issues raised by the two companies’ collecting of behavioral and location data. The advocates claim that U.S. consumers lack meaningful safeguards from such intrusive practices, especially in the mobile space, which has no substantial federal regulation. In addition, the letter questions whether Google will take unfair advantage of such information in marketing its own smartphone, due to come out in 2010.

“The mobile sector is the next frontier of the digital revolution. Without vigorous competition and strong privacy guarantees this vital and growing segment of the online economy will be stifled,” Simpson and Chester conclude.

Google has been on a shopping spree lately with the acquisition of Teracent and AdMob, but Yelp slipped out of its grasp at the last moment.

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