European regulators approve Google-DoubleClick deal

European regulators gave the green light on Tuesday to Google Inc.'s $3.1-billion US takeover of online ad tracker DoubleClick Inc., after ruling the deal would not hurt competition.

The European Commission cleared the deal after investigating how the acquisition would affect the internet ad market, in which both companies are major players.

"The commission's in-depth investigation, opened in November 2007, concluded that the transaction would be unlikely to have harmful effects on consumers, either in ad serving or in intermediation in online advertising markets," the regulatory body said in a statement.

The DoubleClick acquisition has faced resistance from competitors, most notably Microsoft Inc., which has argued a combined Google-DoubleClick company would greatly reduce competition in the online advertising market.

An approved purchase of DoubleClick, the market leader in display ads featuring pictures and video, would cement Google's position as the dominant player in online advertising. Google already dominates the market in search-based advertising.

Not considered competitors

Advertisers are expected to increase their spending online by 22 per cent to $49.5 billion US next year, according to PricewaterhouseCoopers LLP.

But the commission found that the two businesses were different enough that they could not be considered competitors.

"The elimination of DoubleClick as a potential competitor would not have an adverse impact on competition in the online intermediation advertising services market," the commission said.

U.S. regulators cleared the takeover in December, despite concerns from privacy advocates and rivals that the proposal would give too much control over online advertising to Google.

The commission said its decision, however, was based exclusively on economic issues under the European Union Merger Regulation and did not address the merged entity's obligations under EU privacy legislation.