Google denies Yahoo deal is anti-competitive

 

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Posted on 28 Apr 2008 at 08:15

Google claims it is confident regulators will not bar any extension of its advertising search deal with Yahoo.

The US Justice Department is questioning the companies about potential competition issues following a trial of Google's Adsense technology alongside Yahoo's search results.

However, Google denies the deal is anti-competitive as it is "non-exclusive" and falls short of an outright merger, Reuters reports citing an anonymous source close to the company.

Google believes such a partnership would not be any different from partnerships Google has with other web companies including AOL.

By contrast, Google thinks a takeover by Microsoft would raise far more antitrust concerns because the combined company could corner large chunks of multiple markets, from web mail to instant messaging.

Google is the top search engine, with Yahoo in number two spot. Any tie-up between the companies would give them more than 80% of the market, according to ratings company Hitwise.

Yahoo would only respond that it was "premature" to speculate on options the company might pursue with Google.

"The general rule would be that if the arrangement substantially limits competition in some aspect of their business, that would be problematic," says Aaron Edlin, who teaches antitrust law at the University of California at Berkeley.

"Collaboration that comes short of merger is much more apt to pass muster before antitrust authorities."

Author: Reuters