Microsoft-Yahoo Deal Raises Concerns
Four consumer and privacy groups will ask the Justice Department's top antitrust official on Monday to conduct "a thorough and rigorous examination" of the proposed 10-year advertising agreement Microsoft and Yahoo announced in July. In a letter to Assistant Attorney General Christine Varney, the Center for Digital Democracy, Consumer Action, Consumer Watchdog and the U.S. Public Interest Research Group, argue that the firms have historically operated competing ad-targeting businesses in search, display and mobile advertising, as well as competitive ad exchanges.
"In order to ensure that American consumers and competitors are given the 21st century safeguards they require, both the DOJ and FTC must carefully examine how the proposed
Microsoft/Yahoo agreement will impact the digital marketplace," they write in the letter, which will also be sent to FTC Chairman Jon Leibowitz and Senate Judiciary Antitrust Subcommittee Chairman Herb Kohl, D-Wis. Kohl previously said his panel would closely review the deal. An ad arrangement between Google and Yahoo fell apart in 2008 after regulators warned they would file a lawsuit to block it.
The letter argues that the proposed combination of Microsoft's and Yahoo's search platforms effectively undermines the latter as a meaningful competitor as it gives up its ability to offer marketers a robust search and display combination. DOJ must ask whether the plan is "simply a precursor to the eventual absorption by Microsoft of Yahoo's various advertising holdings" and whether the combination of their data collection, profiling, and targeting technologies could place competitors at a disadvantage, they state.
Furthermore, the groups urge the agency to ponder how the transaction will impact the operation of Yahoo's Newspaper Consortium and the overall online publishing community; the mobile market (with Microsoft now providing search services for Verizon and Yahoo's work with AT&T, for example); and how recent developments like Microsoft's partnership with ad giant Publicis may contribute to competitive concerns.
Others have pressed DOJ to have a light touch. Earlier this summer, Senate Judiciary Antitrust Subcommittee ranking member Orrin Hatch, R-Utah, said he did not see "any immediate yellow flags" from an antitrust front and the Competitive Enterprise Institute argued regulators "can best serve consumer interests by leaving well enough alone."
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