Kohl signals concerns with Google/AdMob deal as FTC readies action

"Allowing any one firm to dominate this market could result in higher prices for mobile advertising on the Internet and with respect to smart phone applications, and also could result in lower revenues realized by applications developers," Kohl wrote in the letter, imploring the FTC to investigate the deal closely.

Kohl's letter on Tuesday arrives as FTC lawyers are reportedly ready to announce they hope to challenge the Google/AdMob deal on the grounds it is anti-competitive. A number of anonymous sources, many of whom work for the FTC, later told the Wall Street Journal that the agency has established a litigation team in the event the FTC sues to stop Google's proposed merger.

Their concerns stem from Google's historic dominance of the online advertisement market and recent expansion into the mobile phone world, with new devices that run on its Android operating system. Critics fear the merger would help Google dominate the mobile phone ad world at a time when the infant industry is undergoing a robust expansion.

FTC lawyers are thus likely to recommend the agency thwart the deal, but their suggestion will not have the immediate effect of killing the Google/AdMob merger. Rather, the FTC's Bureau of Competition, as well as its top commissioners, must still approve any challenge before the federal government can take action. 

Nevertheless, Kohl on Tuesday signaled he had yet to decide whether he prefers that approach, but he still implored lawyers to continue scrutinizing the deal's possible effects.

"The importance of this transaction is heightened because of the likely importance of the smart phone advertising market in the future," he noted.