U.S. Federal Trade Commission closes its investigation of Google’s acquisition of AdMob

On 21 May 2010 the U.S. Federal Trade Commission (“FTC”) announced the closure of its investigation of Google’s acquisition of the mobile advertising network company AdMob.

According to the FTC, though the acquisition raised competition concerns as Google and AdMob have competed in the past few years with notable intensity and can currently be considered as the two leading mobile advertising networks, these concerns were outweighed by the recent evidence that Apple, which recently acquired Quattro Wireless, is likely to become a strong competitor in the mobile advertising market. Apple’s entry through the introduction of its iAd network is particularly significant as AdMob’s revenue and market share are largely derived from the iPhone platform.

AdMob also competes with Google in advertising sales on Google’s Android platform. However, according to the FTC, competitive harm appears unlikely as Google’s exercise of market power would risk making the Android platform less competitive against the iPhone and other platforms. In order to remain competitive, Google has a strong incentive to encourage the development for its Android platform of free and low cost applications, which are often made available on the basis of advertising revenue shared with the application developers.

Moreover, according to the FTC, developers of smartphone platforms other than iPhone or Android have strong incentives to facilitate competition among mobile advertising networks. [Juha Vesala]