Google will battle FTC 'very hard' if AdMob deal is blocked

Google (NASDAQ: GOOG) CEO Eric Schmidt vowed the company will fight federal regulators if its proposed $750 million acquisition of mobile advertising network AdMob is denied approval. Asked by Reuters what Google will do in the event the Federal Trade Commission rejects the AdMob deal, Schmidt said "We're likely to fight very hard," adding "It's a very strategic acquisition for Google." According to Schmidt, it's important that the FTC approve the acquisition to foster competition in the mobile ad marketplace: "It would be better if the AdMob acquisition can be approved to see if Google can get a more competitive market on the iPhone platform," he said. Schmidt also called into question Apple's (NASDAQ:AAPL) recent moves that block developers from sharing some iPhone app data with third parties, calling changes to the iPhone developer license "discriminatory against other partners."

Schmidt said he anticipates the FTC will issue a ruling on the AdMob purchase later this month. Last week, the commission received a two-week extension from Google and AdMob to delve further into the deal and its potential impact on competition in the mobile ad segment, with a particular emphasis on Apple's forthcoming iAd initiative. Citing two sources briefed on the review process, The New York Times reports the FTC is looking further into the competitive repercussions of Apple's January deal to purchase AdMob rival Quattro Wireless, a deal that represents the foundation of the iAd effort--Google execs have cited iAd as proof the mobile advertising landscape will remain competitive should the FTC approve its AdMob buy. A source adds that Apple's notorious reluctance to open up on its business could be complicating the FTC's investigation.

The New York Times adds that the FTC and the U.S. Department of Justice are currently in talks to determine which agency will spearhead an inquiry into rules and restrictions mandated by Apple's iPhone developer license agreement. Another source briefed on the FTC's deliberations said its decision on the Google/AdMob deal "would have been much easier without Apple and its new ad system and terms of service provisions."

The Wall Street Journal previously reported both Google and AdMob expect the FTC to block their merger over antitrust concerns. Citing multiple sources close to the situation, the Journal noted that the absence of a clear direction of inquiry by FTC investigators does not bode well for the deal, first announced in late 2009. "The federal government is looking for a way to discipline Google in some way, because of larger concerns about its search power on the web," said one Journal source. "And this is where it looks like it will try to show that concern." Said another observer, "The FTC really wants to do this and is in search of a legal theory that it can win with."

For more on Schmidt's comments:
- read this Reuters article

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