REGULATION (EC) No 139/2004 MERGER PROCEDURE

EN This text is made available for information purposes only. A summary of this decision is published in all Community languages in the Official Journal of the European Union.

Case No COMP/M.4731 ? Google/ DoubleClick

Only the English text is authentic.

REGULATION (EC) No 139/2004 MERGER PROCEDURE

Article 8(1) Date: 11-03-2008

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 11/03/2008 C(2008) 927 final

PUBLIC VERSION

COMMISSION DECISION of 11/03/2008

declaring a concentration to be compatible with the common market and the functioning of the EEA Agreement

(Case No COMP/M.4731 ? Google/ DoubleClick) (Only the English text is authentic)

Table of contents

1 INTRODUCTION ..................................................................................................... 4

2 THE PARTIES........................................................................................................... 5

3 THE CONCENTRATION......................................................................................... 6

4 COMMUNITY DIMENSION ................................................................................... 6

5 MARKET DESCRIPTION ...................................................................................... 6

6 RELEVANT MARKETS......................................................................................... 17 6.1. Relevant product markets ............................................................................ 17 6.1.1. Provision of online advertising space............................................. 17 6.1.2. Intermediation in online advertising ............................................. 20 6.1.3. Provision of online display ad serving technology........................ 23 6.2. Relevant geographical market ...................................................................... 24 6.2.1. Provision of online advertising space............................................. 24 6.2.2. Intermediation in online advertising ............................................. 25 6.2.3. Provision of online display ad serving technology........................ 26

7 COMPETITIVE ASSESSMENT ............................................................................ 26 7.1. Position of the parties in the relevant markets ........................................... 26 7.1.1. Google ............................................................................................... 26 7.1.2. DoubleClick...................................................................................... 35 7.2. Horizontal effects........................................................................................... 52 7.2.1. Actual competition........................................................................... 52 7.2.2. Potential Competition ..................................................................... 60 7.3. Non-horizontal effects ................................................................................... 74 7.3.1. Foreclosure strategies based on DoubleClick's market position in ad serving....................................................................... 74 7.3.2. Foreclosure strategies based on Google's market position in search advertising and ad intermediation services ...................... 86 7.3.3. Foreclosure based on the combination of Google and DoubleClick's assets ........................................................................ 95

Commission Decision of 11/03/2008

declaring a concentration to be compatible with the common market and the functioning of the EEA Agreement

(Case No COMP/M.4731 ? Google/DoubleClick)

(Only the English text is authentic) (Text with EEA relevance)

THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Community, Having regard to the Agreement on the European Economic Area, and in particular Article 57 thereof, Having regard to Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings1, and in particular Article 8(1) thereof, Having regard to the Commission's decision of 13 November 2007 to initiate proceedings in this case, Having regard to the opinion of the Advisory Committee on Concentrations, Having regard to the final report of the Hearing Officer in this case, WHEREAS:

1 INTRODUCTION 1. On 21 September 2007, the Commission received a notification of a proposed concentration pursuant to Article 4 and following a referral pursuant to Article 4(5) of Council Regulation (EC) No 139/2004 (the "Merger Regulation") by which the undertaking Google Inc. ("Google", U.S.A.) acquires within the meaning of Article 3(1)(b) of the Council Regulation control of the whole of the undertaking DoubleClick Inc. ("DoubleClick", U.S.A.) by way of purchase of shares.

1 OJ L 24, 29.1.2004, p. 1.

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2. On 13 November 2007, the Commission concluded that the transaction raised serious doubts as to its compatibility with the common market and with the functioning of the EEA Agreement and decided to initiate proceedings under Article 6(1)(c) of the Merger Regulation.2

3. After a second phase investigation, the Commission has concluded that the concentration is not likely to significantly impede effective competition in the common market or in a substantial part of it and that it is therefore to be declared compatible with the common market and the functioning of the EEA Agreement pursuant to Articles 8(1) and 10(2) of the Merger Regulation and Article 57 of the EEA Agreement.

2 THE PARTIES

4. Google, a United States of America (United States) public company listed on the Nasdaq stock exchange operates what has become the most popular internet search engine, whose search capabilities are offered to end users free of charge. It later started to provide online advertising space on its own websites as well as on partner websites (affiliated to the Google "AdSense" network). At the same time, it improved its offer of free functionalities (such as the Google toolbar to facilitate searches) and other web-based software (gmail, Google Earth, Google maps, an office suite, etc) and, more recently especially via the acquisition of YouTube, started to provide content. It derives almost all of its revenue from online advertising.

5. DoubleClick, a United States non-listed company, mainly sells ad serving, management and reporting technology worldwide to website publishers, advertisers and advertising agencies, in addition to ancillary services. It is launching an intermediation (ad exchange) platform and it owns Performics (a search engine management ("SEM") agency3).

2 On 19 October 2007 the notifying party provided commitments. In accordance with Article 10(1) of the Merger Regulation, the original first phase deadline was extended by 10 working days until 13 November 2007. In its decision under Article 6(1)(c) of the Merger Regulation the Commission considered that these commitments did not address its concerns regarding the elimination of potential competitive constraints and about non-horizontal issues. On 8 February 2008, the notifying party informed the Commission that (i) the commitments offered on 19 October 2007 were explicitly made pursuant to Article 6(2) of the Merger Regulation to enable the Commission to declare the acquisition of DoubleClick by Google compatible with the common market and the EEA Agreement under Article 6(1)(b) of the Merger Regulation and (ii) as the Commission did not declare the transaction compatible under Article 6(1)(b), the commitments were automatically withdrawn upon the adoption by the Commission of the decision initiating proceedings under Article 6(1)(c) of the Merger Regulation on 13 November 2007.

3 See Form CO annex 5.4(ii). A SEM is a company which provides search engine marketing optimization services; Performics also operates an affiliate marketing network, an internet marketing method through which companies reward one or more "affiliate" websites for each visitor or customer gained through the affiliate's marketing efforts.

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