Rep. Anna Eshoo, D-Calif., and other members of the California delegation wrote to Attorney General Michael Mukasey last week regarding the Justice Department's consideration of a preemptive lawsuit to block Yahoo’s non-exclusive advertising agreement with Google. In the letter released Monday, the lawmakers state that "if such action were taken, we believe such an unprecedented suit could detrimentally affect the online advertising market and electronic commerce."
"To our knowledge, DOJ has never before taken preemptive action against a non-exclusive contractual agreement of this type," the letter goes on. "Similar agreements are commonplace in many industries and standard among Internet companies." Microsoft, one of the chief opponents of the Google-Yahoo deal, had a similar arrangement with Yahoo and Google has similar arrangements with tens of thousands of companies, they argued.
"We believe robust competition serves the public interest but if the DOJ blocks this agreement we fear that the threat of additional scrutiny may chill future agreements," the members stated. "The competitive and disruptive nature of the Internet makes it extraordinarily difficult for any company to dominate." The letter concludes by urging the department to "carefully assess the serious consequences" of a challenge to the arrangement and the precedent any action by the DOJ would set.
Assistant Attorney General for Antitrust Thomas Barnett told CongressDaily last week that "we're looking at the issues and we're trying to work through them as quickly as we can" but he would not indicate how much longer his staff needs to reach a resolution. Read more here.
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