Microsoft senior vice-president and general counsel Brad Smith also told the committee that the Google-DoubleClick deal would become a serious threat to consumers’ privacy.
“If Google and DoubleClick are allowed to merge, Google will become the overwhelmingly dominant pipeline for all forms of online advertising,” Mr Smith told the Senate Subcommittee on Antitrust, Competition Policy and Consumer Rights.
“This merger will almost certainly result in higher profits for the operator of the dominant advertising pipeline, but we believe it will be bad for everyone else. It will be bad for publishers, it will be bad for advertisers and, most importantly, it will be bad for consumers,” he said.
Microsoft is no stranger to antitrust cases, or the inside of Senate committee rooms, having defended itself many times on many different fronts.
But while Mr Smith acknowledged there was a large degree of self interest in the Microsoft evidence to committee, he said there were genuine concerns about the acquisition would have on the ongoing development of the internet.
“We believe that the future of the Internet will be decided by developments in online advertising,” he said, adding that advertising was the fuel that continued to power the internet and to drive the digital economy.
Microsoft estimates that online advertising is already a US$27 billion (A$30 billion) business, and is projected to double to US$54 billion in the next four year alone.
“To put that in perspective, that will be roughly the same size as the television and radio industries in this country today, combined,” Mr Smith said.
Microsoft believes that the privacy issues related to internet advertising – where search companies collect personal information about computer users in order to better target advertising – is also a antitrust issue.
“Given the nature and economics of online advertising, this concentration of user information means that no other company will be able serve ads as profitably,” Mr Smith said.
“In short, it will substantially reduce the ability of other companies to compete.” he said.
“I appreciate that the technology and business models are new and dynamic, and I fully agree that the internet is continuing to change very rapidly,” he said. “But no one is permitted to buy a dominant position by acquiring its single largest competitor.”
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