DOJ seeks more data on Microsoft-Yahoo deal

By Sharon Gaudin, with Paul Meller

September 21, 2009 06:00 AM ET

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Computerworld - The U.S. Department of Justice has asked Microsoft Corp. and Yahoo Inc. to hand over more information regarding their proposed search partnership.

Microsoft and Yahoo in July announced a deal under which Microsoft's new Bing search engine would run on multiple Yahoo sites, and Yahoo would handle sales of premium search advertising for both companies.

A Microsoft spokesman confirmed that the DOJ requested the data earlier this month. He noted that the inquiry was not a surprise and pointed out that the company said in July that it "anticipated a close review of the agreement, given its scope."

Microsoft still hopes the new business arrangement will go into effect early next year, the spokesman added. He declined to identify the information sought by the DOJ.

Meanwhile, the company last week confirmed that it and Yahoo have started "informal discussions" with European Commission regulators to determine whether the agreement needs to be subjected to a formal merger probe in Europe.

The EC declined to comment on the talks.

Antitrust litigator Matthew Cantor, a partner at Constantine Cannon LLP in New York, applauded the DOJ for investigating the proposed deal.

"This is not run-of-the-mill," he said. "[The DOJ] would only request additional information if there was some kind of presumption that the deal would cause antitrust effects."

Cantor pointed out that the partnership would leave only two major search offerings -- Google and Bing.

Microsoft contends that the deal will improve competition in the search business.

Read more about government in Computerworld's Government Knowledge Center.

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