Part I: FTC 4-1 approval of Google merger; the FTC gerrymandered its market definition...

To provide some timely analysis after quickly reading the FTC's 4-1 approval of the Google-DoubleClick merger let me provide some quick and important take aways:

The most important line in the FTC's statement was: "the companies are not direct competitors in any relevant antitrust market, eliminating the need for further analysis."

First, the FTC majority clearly did not want to risk losing in court again so the FTC effectively gerrymandered a tortured market definition that essentially granted Google a "get out of antitrust jail free card" for the purposes of this merger review.  

• That the FTC could conclude that the two leading online advertising companies that share the same clients, customers, users, business purpose and clickstream targetting data are not direct competitors in ANY relevant antitrust market -- stretches all credulity.
  • Under  this gerrymandered and tortured market definition standard -- essentially no company is a direct competitor of any other company because on the Internet, all companies are unique complementary players that only "complement" one another but never "compete" with one another.
• By concluding they don't compete, the majority provides itself blanket justification and political cover for not looking seriously at the troublesome questions of market power, extension of market power, network effects, or cornering intermediary markets. They ducked em. How convenient.

Second, Google is now on antitrust notice. The majority said: "We want to be clear, however, that we will closely watch these markets and, should Google engage in unlawful tying or other anti-competitive conduct, the Commission intends to act quickly."

• Make no mistake, Google put itself on the antitrust community's radar screen with this acquisition, and they will be watched very closely by market participants, the FTC, the EU, the press and others, including me.
• This is not the end of Google's FTC antitrust scrutiny only the end of the beginning of Google's ongoing antitrust problems.

Third, while the FTC majority clearly wanted to duck these potential problems for now, it is clear from Commissioner Harbour's detailed and powerful dissent, Commissioner Leibowitz' statement and the majority's statement that they will "closely watch these markets", that there are very serious potential anti-competitive problems at play here.  

In short, the FTC between the lines was saying that they don't feel confident looking forward much and acknowledging that the courts won't allow them much leeway in forward-looking judgments.

• This "soft underbelly of antitrust law" will prove to be a very serious weakness in protecting competition in the dynamic Internet marketplace that Google is already dominating and will dominate further with the gift of acquiring DoubleClick -- if the EU also looks the other way on this transaction.