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EU To Deepen Google-DoubleClick Inquiry

European Union antitrust regulators launched an in-depth probe Tuesday into Google Inc.'s $3.1 billion bid for online ad broker DoubleClick, saying an initial investigation showed the deal would raise competition concerns.

The EU's executive Commission set an April 2 deadline by which to reach a final decision on the deal, which has raised concerns by Google rivals Microsoft Corp. and Yahoo Inc. -- both of which fear it will give the Internet search leader too much power in online advertising.

The European Commission described Google and DoubleClick as "the leading providers" of online advertising space and services as well as ad-serving technology, and said its extended probe would examine whether the deal "could lead to anticompetitive restrictions for competitors operating in these markets and thus harm consumers."

DoubleClick helps its customers place and track online advertising, including search ads, which Google has turned into an extremely lucrative business.

The EU said a preliminary probe, launched after Google notified the EU of its bid for New York-based DoubleClick in September, found the proposed acquisition "would raise competition concerns."

Google Chief Executive Eric Schmidt said the company was "obviously disappointed" by the EU decision to extend the review.

"We will continue to work with the Commission to demonstrate how our proposed acquisition will benefit publishers, advertisers and consumers," Schmidt said in a statement. "We seek to avoid further delays that might put us at a disadvantage in competing fully against Microsoft, Yahoo, AOL and others whose acquisitions in the highly competitive online advertising market have already been approved."

Yahoo Europe's Managing Director Toby Coppel welcomed the EU investigation, saying it "was needed."

"Competitive online advertising markets in Europe are of great importance to publishers and advertisers, as well as being key to innovation and consumer choice," Coppel said.

Consumer advocates also have raised concerns about data privacy if the deal is approved.

"Google is quickly becoming the key digital gatekeeper for the online publishing and advertising marketplace," said Jeff Chester, executive director of Washington-based Center for Digital Democracy. "At stake here is more than just the skyrocketing Google share price ... there must be meaningful competition and consumer protection in the online ad sector."

Google has insisted that joining it with DoubleClick would help expand the booming Internet ad market.

Rivals have been looking to beef up their Internet advertising capabilities, with Microsoft, Yahoo and Time Warner Inc.'s AOL all making acquisitions in the space.

The EU investigation will be conducted over 90 working days, the Commission said in a statement. It will not include an inquiry into privacy concerns that have been raised by European and U.S.-based consumer and privacy advocacy groups.

U.S. antitrust officials also are looking into the deal, though they are including privacy issues in their review.

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