The U.S. Federal Trade Commission (FTC) is investigating Google's proposed US$3.1 billion purchase of DoubleClick, according to news reports Tuesday.

The investigation began at the end of last week as a result of concerns over privacy issues and the potential for anticompetitive practices, The New York Times reported, quoting anonymous sources.

The two companies announced the all-cash agreement last month, with both Google and Microsoft pursuing the online advertising company, as the competition between the two for a greater share of the online ad market increases.

Privacy groups, including the Electronic Privacy Information Center (EPIC) and the Center for Digital Democracy (CDD), filed a complaint with the FTC on April 20, asking that the government agency block the merger unless Google will ensure users' privacy, including deleting information that could identify an individual user once that user ends his or her session with a Google site.

Antitrust issues are likely to be of greater concern than privacy ones, with regulators more concerned about the merger's effect on other online ad players and their ability to compete against the new combined entity, the report said.