Google Faces Potential AdMob Antitrust Trial

Google’s proposed acquisition of mobile advertising company AdMob appeared to be drawing more regulatory scrutiny from the Federal Trade Commission, experts said. The agency was reportedly looking for declarations from Google rivals.

If the agency is collecting the evidences, “we know they have some significant concerns,” said Stephen Calkins, a former FTC general counsel and now a professor of law at Wayne State University. The FTC was reportedly asking at least two companies to sign statements. The agency declined to comment. When the FTC begins to look into a merger, it typically doesn’t obtain declarations because it’s only trying to learn about the deal, Calkins said. At the end of a merger review process, the agency would need written declarations that it can bring to a court to ask for an injunction, he said.

"We're continuing to talk with the FTC and provide the information that they've asked for, but we're not going to discuss the details of that process,” a Google spokesman said. “We're confident that they'll conclude that the rapidly growing mobile advertising space will remain highly competitive after this deal closes.” Google and AdMob combined would form the largest mobile advertising company -- they had 21 percent of the U.S. market in 2009, said IDC analyst Karsten Weide. Google now makes a “very small amount” from mobile ads relative to its overall revenue, but the prospects for this space are excellent, Google said in its FAQ on the acquisition.

The FTC is now very likely to file an injunction in federal court to block Google’s proposed acquisition of AdMob, if Google doesn’t walk away from the deal, said Scott Cleland, chairman of NetCompetition.org. It’s a pro-competition forum that often opposes Google. Signed declarations are particularly indicative of the likely outcome because the FTC has moved largely from an investigative phase to largely a prosecution phase, he said.

It’s not all bad news for Google: the FTC could collect affidavits and still not end up litigating, Calkins said. Collecting declarations doesn’t mean the agency has decided to go to the court, he said. AdMob’s immediate competitors such as JumpTap and Millennial Media weren’t complaining about the lack of competition or a negative impact on their market, said Greg Sterling of consultancy Sterling Market Intelligence. Those competitors instead saw it as a big boost for their businesses, he said. Still, long-time Google critics argued in favor of blocking the deal, he said. Approval or challenge will turn in part on how the market is “scoped” and defined, he said. Opponents would argue that while mobile display itself remains competitive, if such a deal goes through the larger competitive outlook for digital advertising generally is potentially adversely impacted, he said.