Antitrust review of Google-Yahoo deal no surprise

The US DOJ's investigation of an ad deal between Yahoo and Google comes as little surprise to many in Washington

News reports this week that the US Department of Justice is formally reviewing a proposed advertising deal between Google and Yahoo came as no surprise to some tech trade groups and advocacy groups based in Washington..

A Washington Post story Wednesday saying the DOJ had launched a formal investigation of the ad deal wasn't much of a shocker to Google and Yahoo, either, as the two companies had voluntarily delayed the implementation of the deal for more than three months in recognition that the DOJ would look at the antitrust implications.

A DOJ spokeswoman said Wednesday that the agency has acknowledged since mid-June that it was looking into the deal. A public confirmation that the DOJ is examining the deal amounts to a "formal investigation," she said.

Google said it is cooperating with the DOJ.

"We are continuing to have cooperative discussions with the Department of Justice about this arrangement, and voluntarily delayed implementation for three and a half months in order to give them time to understand the agreement," said Adam Kovacevich, a Google spokesman. "That process is continuing exactly as expected. We are confident that the arrangement is beneficial to competition, but we are not going to discuss the details of the process."

Google and Yahoo announced June 12 a deal to run some of Google's advertisements alongside Yahoo search results. The announcement came just hours after a proposed acquisition of Yahoo by Microsoft fell through, although Microsoft has continued to express interest in such a deal.

Google and Yahoo had run a test of the advertising program in April.

Still, with recent news of the DOJ investigation, representatives of two tech trade groups said they expected the agency would look into the deal.

"Even though serious antitrust problems are unlikely, it was appropriate for the parties to offer up a delay while regulators review the deal," said Ed Black, CEO of the Computer and Communications Industry Association, a trade group that has raised concerns about anticompetitive behavior in the tech industry. "This is a good provision to help everyone understand the facts surrounding the deal and make sure there is no harmful impact on competition or consumers."

A formal review was "inevitable," added Jonathan Zuck, president of the Association for Competitive Technology, a trade group often aligned with Google competitor Microsoft. The deal is between the number one and number two companies in the "crucial" online ad market, Zuck added.

"It's a very complex deal in a very complex market," Zuck said. "The deal raises a lot of questions that the DOJ must answer before letting it go."

Google has worked hard to structure a deal that would meet regulatory approval, he said. "The big question is whether Google could ever do enough to satisfy competition concerns over the consolidation of number one and number two players in the market."

The Center for Digital Democracy (CDD), an advocacy group focused on consumer privacy, called on the DOJ to reject the Google-Yahoo deal.

"Google has reached way beyond the proverbial tipping point when it comes to its dominance of the interactive ad business," said Jeffrey Chester, the group's executive director. "Yahoo's agreement to the deal is a desperate move acknowledging they can no longer compete with Google. The DOJ -- even a Bush Administration business-friendly one -- shouldn't permit Google to operate a key part of Yahoo's business."

Earlier this month, CDD asked the U.S. Federal Trade Commission to investigate how the deal could affect consumer privacy. "Privacy is at risk, as Google gains access to even more consumer data," Chester said.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Grant Gross

IDG News Service
Show Comments

Cool Tech

SanDisk MicroSDXC™ for Nintendo® Switch™

Learn more >

Breitling Superocean Heritage Chronographe 44

Learn more >

Toys for Boys

Family Friendly

Panasonic 4K UHD Blu-Ray Player and Full HD Recorder with Netflix - UBT1GL-K

Learn more >

Stocking Stuffer

Razer DeathAdder Expert Ergonomic Gaming Mouse

Learn more >

Christmas Gift Guide

Click for more ›

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?