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US Senate to Probe Google-Yahoo Deal

Posted on: Tuesday, 17 June 2008, 06:00 CDT

The US Senate antitrust subcommittee has announced an investigation into the advertising and search deal secured last week between Google and Yahoo.

The Google-Yahoo collaboration does not require pre approval from the US antitrust authorities as the two companies are not merging. The government, however, could challenge the agreement in court if it comes to the conclusion that it would restrain competition between them.

Antitrust lawyers said such a situation will not arise since the deal is not exclusive and allows Yahoo to pursue its own advertising business. It also allows Yahoo to partner with other companies in the business.

Herb Kohl, the chairman of the Senate sub-committee on antitrust, competition policy and consumer rights said: "The consequences for advertisers and consumers could be far-reaching and warrant careful review, and we plan to investigate the competitive and privacy implications of this deal."

Microsoft has also appealed to advocacy groups in the US, insisting that a deal between Google and Yahoo over search advertising will create a monopoly. Microsoft spokesman Jack Evans said: "Our position has been clear since April that any deal between these two companies will increase prices for advertisers and start to consolidate more than 90% of the search advertising market in Google's hands."

Kent Walker, general counsel at Google said Google studied similar non-exclusive pacts in other industries while working out a deal with Yahoo. "We see this as very much analogous to Toyota selling hybrid technology to General Motors and competing in the overall market, or Canon providing laser printer engines to HP and competing in the laser printer market," he added.

Source: Datamonitor

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