EU antitrust regulators launched an in-depth probe on Tuesday into Google Inc's US$3.1 billion bid for online ad tracker 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's rivals Microsoft Corp and Yahoo Inc -- both of which fear it will shrink competition for Internet advertising.
The European Commission described Google and DoubleClick as "the leading providers" of online advertising space and services and ad-serving technology, and said its extended probe would examine whether the deal "could lead to anti-competitive 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 -- more than its nearest search competitors Yahoo and Microsoft -- has turned into an extremely lucrative business. It places ads on Web pages that targeted consumers are likely to use, generating money for smaller publishers and lesser-visited pages.
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 merger "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."
Other advertisers have expressed concerns that the deal would leave Google in a dominant position on the Internet, while consumer advocates have cited concerns about data privacy and the knock-on effect on media that increasingly rely on Internet ads to pull in revenue.
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.
Jeff Chester, executive director of Washington-based Center for Digital Democracy, said the full-scale probe proved that the EU "recognizes the serious consequences" of the Google-DoubleClick deal.
"Google is quickly becoming the key digital gatekeeper for the online publishing and advertising marketplace," Chester said. "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, however, that joining it with DoubleClick would help expand the booming Internet ad market.
The company's rivals have been looking to beef up their Internet advertising capabilities, with Microsoft buying Seattle-based online advertising firm aQuantive Inc and advertising conglomerate WPP Group PLC's purchase of online ad company 24/7 Real Media Inc.