EU probes Google tie up with Yahoo

 

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By Reuters

Posted on 16 Sep 2008 at 08:54

EU regulators have confirmed they are looking into a planned deal between Google and Yahoo to share advertising revenue.

"In mid-July, the EU decided to open a preliminary investigation on its own initiative into potential effects of the Google-Yahoo agreement on competition in the European Economic Area (EEA) market," says Jonathan Todd, a spokesman for European Competition Commissioner Neelie Kroes.

Under terms of the deal, first announced in June, Google will supply Yahoo with advertising services to run alongside Yahoo's own web search system.

Google and Yahoo say the deal will only effect the US and Canada, but the World Association of Newspapers claims it will hurt Yahoo's ability to compete against Google in the future and called on EU antitrust authorities to scrutinise it.

Commission spokesman Todd said there was no deadline for the investigation in Brussels.

Google and Yahoo say they will cooperate with the Brussels probe.

"Yahoo has been and will continue to work with the relevant regulatory agencies to provide officials with the necessary information about this business agreement, which it believes will strengthen competition in search and make advertisements more relevant for our users," the company says in a statement.

It was a sentiment echoed by Google.

"The agreement is limited in scope to Yahoo's US and Canadian websites, and it will not have any significant effect on Europe. Google is cooperating with the commission and is confident that it will reach the same conclusion," says Google spokesman Adam Kovacevich.

The probe is similar to one in Washington, where the US Justice Department is also looking into whether a commercial tie-up between the two companies, which together have 80% of the market, would violate antitrust law.