A US government watchdog is investigating Google's planned acquisition of DoubleClick, after search engine rivals complained that the takeover would hamper trade.
The deal, worth $3.1bn (£1.56bn), could now be under threat after the Federal Trade Commission began probing whether the merger is lawful.
Microsoft is believed to have prompted the investigation, claiming that the deal constitutes a monopoly of the online advertising market and could destroy all competition.
US anti-trust laws state that no single company can gain domination of a market, and the FTC, the government agency that regulates consumer laws, duly began its investigations at the end of last week.
Microsoft may be seeking revenge after being outbid in the negotiations for DoubleClick, which helps link up advertising agencies, marketers and website publishers wanting to put ads online.
The software giant was not the only organisation to voice a grievance about the DoubleClick deal. An American pressure group, The Electronic Privacy Information Centre, filed a complaint about the deal with the FTC late last month.
It is anxious that the deal could have privacy implications, if Google was to combine DoubleClick's data with the search query histories it already records, creating "super-profiles" of users.
Activity in the search engine and online ad market has boomed in recent months, kicking off with the DoubleClick deal on April 13. Shortly after, Yahoo! paid $680m for the 80% stake in online ad exchange firm Right Media it did not already own; WPP Group paid $649m for 24/7 Real Media, a competitor to Double Click in the ad serving world; and Microsoft paid $6bn for internet advertising firm aQuantive.
Separately, Google has been urged by European data protection officials to address its concerns about the company's practice of retaining information on searches by users for two years.
Franco Frattini, the European Union justice commissioner, has backed the concerns raised by the officials, who represent 27 countries in Europe.
Google said it would respond before the group holds its next meeting on June 19.
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