Google and Yahoo try to head off antitrust suit

 

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By Reuters

Posted on 14 Oct 2008 at 08:07

Google and Yahoo are in talks with the US Justice Department in an effort to head off an antitrust challenge to their proposed advertising agreement.

The settlement negotiations are at an early stage and it isn't clear whether they will resolve US objections or be acceptable to the two companies, the Wall Street Journal claims, citing lawyers close to the effort.

Advertisers, who have raised objections to the deal, told Justice Department officials that the partnership will limit competition, raise prices and reduce choice.

Under the agreement, Google would supply Yahoo with advertising services to run alongside Yahoo's own web search system. Yahoo runs the web's second most popular search service.

Yahoo struck the agreement in June with Google, the world's dominant supplier of web search services, as it sought to shore up its advertising business and ward off pressure to merge from Microsoft.

In the settlement talks with the Government, both companies have discussed concessions, the paper claims.

Even as senior Justice Department officials weigh the companies' proposals to resolve antitrust issues, its trial staff continues to prepare a lawsuit to block the deal, the Journal claims, citing lawyers and executives contacted by the Government.

The companies have been cooperating with the Justice Department's investigation and recently agreed to delay implementing the deal until at least 22 October to give federal and state antitrust officials time to complete their separate investigations.