European Commission to probe Google's DoubleClick deal

Google's plans to purchase DoubleClick for $3.1 billion (£1.4 billion) have been put on hold as an in-depth examination of the merger was announced by the European Commission.

The Commission will have until 2 April, exactly 90 working days, to assess whether or not the deal will be acceptable under the EU Merger Regulation.

In a statement released yesterday the Commission stated that its "initial market investigation indicated that the proposed merger would raise competition concerns in the markets for intermediation and ad serving in online advertising."

"We are obviously disappointed by the European Commission's decision to extend its review of our acquisition of DoubleClick" Google chief executive Eric Schmidt said in a statement.

"We will continue to work with the Commission to demonstrate how our proposed acquisition will benefit publishers, advertisers and consumers."

The deal has been mired in controversy ever since it began in April. Attacks from private groups, an ongoing enquiry by the US Federal Trade Commission and now the four-month Commission probe are all problems the merger has been faced with in just seven months.

The Commission said that one of its focuses will be "whether without this transaction, DoubleClick would have grown into an effective competitor of Google in the market for online ad intermediation."

Google had been confident about sealing the deal with DoubleClick as recently as last month. While speaking to reporters Schmidt announced his optimism about closing the deal.

The search-engine giant is not alone in its acquisition of internet ad firms though. In May Microsoft purchased aQuantive for $6 billion (£2.9 billion), followed by AOL's buyout of Tacoda for $275 million (£133 million) in July, as well as Yahoo's acquisition of BlueLithium in September for $300 million (£145 million).

Google filed for European permission to acquire DoubleClick in late September.

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