Advocacy groups urge FTC to bar Google-AdMob deal

People ride their bikes past Google Inc. headquarters in Mountain View, California, May 8, 2008.

WASHINGTON (Reuters) - Two advocacy groups asked U.S. antitrust regulators on Monday to block Google's purchase of AdMob, a provider of advertising services for mobile phones, on antitrust grounds and to address privacy issues raised by the deal.

Consumer Watchdog, a consumer advocacy organization, and the Center for Digital Democracy, an advocate of open access to the Internet, said in a letter to the Federal Trade Commission that the proposed deal would "substantially lessen competition in the increasingly important mobile advertising market."

The groups also said the deal created privacy concerns, which are not normally considered in antitrust analyses.

"Google amasses a gold mine of data by tracking consumers' behavior as they use its search engine and other online services. Combining this information with information collected by AdMob would give Google a massive amount of consumer data to exploit for its benefit," said the emailed letter, which was addressed to FTC Chairman Jon Leibowitz.

Google, the No. 1 online search engine, has said that the FTC requested additional information about the $750 million deal last week. In the absence of a second request, U.S. antitrust regulators normally approve deals within 30 days.

If approved, Google's purchase of privately held AdMob would be its third most expensive purchase behind the $3.1 billion acquisition of DoubleClick and the $1.65 billion purchase of YouTube.

Google said in an e-mail statement that it was certain that mobile advertising would remain competitive despite the deal.

"Google has a track record of providing strong privacy protections and tools, like the new Dashboard, for users to take control or opt out of data collection, and it will apply the same approach to privacy following this acquisition," it said in the statement.

Google generates the majority of its revenue, which totaled roughly $22 billion in 2008, by selling ads that appear alongside its Internet search results.

The FTC could not immediately confirm receipt of the letter.

Google has experienced increasing regulatory scrutiny as it has grown. The U.S. Department of Justice in September asked a New York court to reject Google's settlement with book publishers and authors groups that would allow the company to sell digital copies of some books.

(Reporting by Diane Bartz; Editing by Steve Orlofsky)