December 13th, 2007

Lawmaker Presses Google For Answers on Privacy Issue

By Corey Boles
Wall Street Journal

A senior Republican lawmaker, in a letter to Google Inc. Chief Executive Eric Schmidt, expressed his concerns about privacy aspects of the company’s proposed takeover of online advertising broker DoubleClick, and demanded answers to a lengthy list of questions.

The letter, dated Wednesday, from Rep. Joe Barton (R., Texas), addresses virtually every aspect of both Google’s and DoubleClick’s businesses, asking how consumer information is stored and used by the companies. Mr. Barton is the ranking minority member on the House Energy and Commerce Committee and the co-founder of the House Privacy Caucus.

Many opponents of the transaction, such as Microsoft Corp. and AT&T Inc., have focused on the dominant position that Google would enjoy in the online advertising market. But some public interest groups and lawmakers have focused more on privacy issues.

On the dominance issue, Google argues that online advertising is not a distinct marketplace but simply an extension of the wider advertising market. It also points to the fact that currently it has virtually no presence in online display or graphic-based ads.

As for privacy concerns, Google already retains immense amounts of consumer information, and fears have been expressed that this practice will only increase once the merger is complete. Privacy advocates say that it is troubling for large companies to hold and use such vast amounts of information on consumers’ online habits.

In an earlier letter from Google’s Mr. Schmidt to Mr. Barton at the end of November, the head of the Internet company said “our goal is to provide the benefits of online advertising in a way that protects our users’ privacy.”

The Barton letter asks 24 questions, many of them containing several parts, and calls for a response from Google no later than Dec. 18. The letter expresses Mr. Barton’s frustration with the company, stating that it has rebuffed several attempts by Commerce panel staffers to visit the company.

The letter refers to a conversation between Messrs. Barton and Schmidt in early November, when Mr. Barton said he wanted some of his staff members to visit Google’s Mountainview, Calif., headquarters.

“Since then, all efforts to reach a mutually agreeable time have been rebuffed, and it begins to seem that no date for a visit is sufficiently convenient to Google,” said Mr. Barton in the letter. “Your warm initial invitation followed by Google’s chilly response to a proposed visit by Committee counsels is disconcerting.”

A spokesman for Google said that the company is willing to meet committee staffers. The first attempt at a meeting came shortly after the Thanksgiving holiday, when much of Google’s senior staff was in Florida for a debate among Republican presidential candidates, jointly hosted by Google subsidiary YouTube, according to the spokesman.

He said the company had offered to meet committee staffers in Washington, but hasn’t heard a response.

In order to complete the transaction, Google needs the approval of competition authorities in the U.S. and the European Union. In the U.S., the Federal Trade Commission is reviewing the deal.

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