Inside Google

Google’s proposed $750 million acquisition of mobile ad network AdMob would threaten privacy while also decreasing competition, two advocacy groups said Monday in a letter to Federal Trade Commission chair Jon Leibowitz. The organizations are asking the FTC to block the deal.

"The consolidation of AdMob into Google would provide significant amounts of data for targeting advertising," the Center for Digital Democracy and Consumer Watchdog argue.

The organizations say they are concerned that Google will combine the "goldmine of data" it collects by tracking users’ search activity with AdMob’s information about mobile users. "The super data profiles that a combined Google/AdMob would facilitate and their use to target advertising raise tremendous privacy issues," the groups contend.

Google counters that it "has a track record of providing strong privacy protections and tools," and will "apply the same approach to privacy following this acquisition." Earlier this year,  Google began allowing users to exert more control over online targeting by viewing and editing the marketing categories they had been placed in based on their Web activity.

In addition to the privacy issues, the groups argue that the merger will give Google too much power in the nascent mobile ad space. "Instead of acquiring dominance in this increasingly important market through legitimate competition and innovation, Google is buying its way to a preeminent position in the mobile advertising sector, diminishing competition to the detriment of consumers."

Google dismissed concerns about the deal’s impact on the mobile ad market. "We’re confident that the FTC will conclude that the rapidly growing mobile advertising space will remain highly competitive after this deal closes," a spokesperson said.

At least one analyst — Greg Sterling, who heads Opus Research’s mobile search practice — appears to agree with Google that its acquisition of AdMob won’t hurt competition. "AdMob’s disappearance as an independent player in mobile display doesn’t make the market substantially less competitive," he argues.

Aside from the quantity of data that Google can harness for behavioral targeting, the consumer organizations also argue that AdMob’s data about smartphone users and applications could give Google competitive information that it could use to market its own new smartphone, slated to launch next year.

The groups also say that the deal would increase Google’s importance to marketers. "With its ability to dramatically sell, serve and service all types of mobile advertising media sold through the AdWords interface and facilitated by its DoubleClick subsidiary, Google would become an even more dominant one-stop shop for advertisers."

Google said last week that the FTC has requested additional details about the deal. The move means the FTC is closely scrutinizing the potential merger, but doesn’t necessarily indicate that the commission aims to prevent the deal.

It’s not yet clear whether the FTC is considering privacy as part of its review of the acquisition. Two years ago, when the agency cleared Google’s purchase of DoubleClick, a majority of commissioners said that any consumer privacy issues raised by the deal did not affect the competitive landscape.

But the FTC still could influence the merger’s terms, including how Google uses AdMob’s data. Jeff Chester, executive director of the Center for Digital Democracy, says there is reason to believe the FTC intends to push for privacy protections in online deals. For instance, he says, this summer the agency persuaded Google to institute a new privacy policy for its proposed book digitization project.