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The argument was the centerpiece of a European Parliament hearing to consider the burgeoning role of the internet in impinging on the privacy of citizens.

The US Federal Trade Commission (FTC) signed off last month on Google's $3.1 billion deal, which combines its dominance in pay-per-click advertising with DoubleClick's market-leading position in display ads.

After listening to a visiting FTC commissioner, privacy advocates and European parliamentarians question the impact of the deal on European citizens' online privacy, Google's global privacy counsel shot back. "People (are) trying to take a privacy case and shoehorn it into a competition law review," said Peter Fleischer. "I can understand that people continue to peddle this theory in Europe after having lost in the United States."

Google's attack did little to ease tensions. "The reason you

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want to have the data is because it gives you a competitive advantage," replied Sophie in 't Veld, the Dutch parliamentarian who sought the hearing. "It is business. I don't think they can be completely disconnected and we should discuss that side of things, too."

She called information a competitive factor and declared: "Having that much information is market power."

Federal Trade Commissioner Pamela Harbour said her four colleagues at the FTC had taken a traditional approach and excluded questions of privacy in their decision. "I believe a traditional approach does not capture the interests of all the parties. There is no proxy for the consumer whose privacy is at stake," she said.

The European Commission has said it will not take privacy into consideration. In the past six years, it has not turned down any all-US deal approved by the American authorities.

Fleischer, asked about the deal rationale, said Google wanted to get into banner advertising. He said his firm did not build dossiers on individuals through searches, instead using the words of each search to decide what ads to display with it. Contractual limits would prevent Google from using DoubleClick information from individuals, he said.

Stavros Lambrinidis of Greece, who chaired the meeting, asked whether Google turned information over to government authorities. Fleisher said that if authorities go "through a valid legal process we will respond to it."