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above, these platforms include large players such as Microsoft166 (with a Q u a n t i v e , A t l a s , D R I V E p m a n d A d E C N ) , Y a h o o ! ( Y F P , Y a h o o ! S m a r t A (ADTECH, Advertising.com, Tacoda) d s RightMedia and BlueLithium), AOL167

and WPP (24/7 RealMedia, OpenAdstream). Moreover, the market investigation has also identified a number of intermediation platform that have developed their own in-house ad serving technology, such as ValueClick, Zanox, Quigo and TradeDoubler.

  • 328.

    Finally, the evidence on network effects and the competitive advantage that the combination of data may confer, as well as the evidence of entry and growth into intermediation are not consistent with the view that the new entity would be able to exert market power in the long-term due to high barriers to (re)entry.

  • 329.

    To sum up, the Commission has examined the potential for anti-competitive foreclosure arising from the acquisition by Google of DoubleClick, a leading ad serving tool provider. The theories of harm were based on both the vertical and conglomerate dimensions of the merger and focused on strategies through which the new entity might use the leading position of DoubleClick to enhance the market position of Google's intermediation platform at the expense of rivals and ultimately of consumers. These theories of harm relied on a number of assumptions regarding the characteristics of the markets under consideration, such as DoubleClick's degree of market power, the level of switching costs, the presence of direct and indirect network effects and the share of ad serving in the costs of intermediation. The market investigation has revealed that DoubleClick is not able to exercise a significant degree of market power, that switching costs are manageable, that ad serving represents a small proportion of ad costs/revenues and a limited proportion of intermediation revenues and that network effects are not strong enough to induce tipping. In such circumstances, it is unlikely that the new entity would have the ability or incentives to engage in foreclosing strategies and that any such strategy, if implemented, would lead to the marginalisation of rival ad networks and ad exchanges to the detriment of consumers.

      • 7.3.2.

        Foreclosure strategies based on Google's market position in search advertising and ad intermediation services

    • 330.

      The second category of non-horizontal concerns described above takes Google's market position in search advertising and (search) ad intermediation services as a starting point assuming that Google may attempt to foreclose rivals by bundling its sales of search ads or its intermediation services for the sale of search and/or non-search ads with DoubleClick's ad serving technology. Google's search ad services or its (search) ad intermediation services would thus be the bundling services and DoubleClick's ad serving would be the bundled

166

In fact, the notifying party has indicated that Microsoft has already started to offer bundles including the use of its intermediation services and ad serving tools.

167

In September 2007, AOL announced the launch of "Platform A", and ad buying platform and network intending to integrate AOL's ad network with ADTECH, Tacoda as well as other ad networks the company currently purchased (ThirdScreenMedia – a mobile phone ad network – and Lightningcast – a rich media solution provider).

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