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!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
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

Father’s Day Gift Guide

Brand Post

PC World Evaluation Team Review - MSI GT75 TITAN

"I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it."

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

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.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?