DOJ should investigate Google-Yahoo deal, says think tank
Potential for deal to be 'black hole that swallows up Yahoo' justifies action
Computerworld - The prospect that a Google-Yahoo search advertising deal will end up as a "black hole that swallows up Yahoo" could justify an antitrust injunction, according to a white paper released today by an antitrust think tank.
The proposed partnership could be blocked by the U.S. Justice Department based on Google Inc. and Yahoo Inc.'s combined share of the search advertising market, the lack of new entrants into the market and the absence of market efficiencies being created by the deal, said nonprofit American Antitrust Institute (AAI).
"With a U.S. market share approaching 70% to 80% depending on how the market is defined, Google would already be considered a near-monopolist under traditional antitrust standards, and the combined market share of Google and Yahoo would likely exceed 90%," the report said. "The loss of an innovative competitor in the extraordinarily concentrated market would surely have anticompetitive effects for advertisers that would undoubtedly ripple into other online advertising markets to the detriment of content providers, advertisers and consumers generally."
AAI said the agreement itself, and the potential that Yahoo would exit the paid search business to rely on its partner should prompt the government to view the agreement as "inherently suspect."
The group suggests that government agencies insist that any agreement legally ensure that Yahoo continue to develop and operate its search business.
Legally enforceable restrictions suggested by the think tank would do the following:
- Prohibit Yahoo from using Google ads on organic search results outside North America and on third-party Web sites.
- Prohibit Google and Yahoo from setting minimum bid or reserve prices.
- Prohibit Yahoo from using Google ads when Yahoo has a sufficient number of ads of its own.
"The government should insist on a consent decree which preserves Yahoo's incentives to remain in the paid search market," the white paper went on to note. "If such a consent decree cannot be achieved, then the government should seek an injunction to prevent Google and Yahoo from implementing their agreement."
Google and Yahoo have faced a storm of criticism over the proposed deal, which would have Yahoo running advertising from Google alongside Yahoo search results. The proposed Google-Yahoo partnership has come under fire from major advertiser groups and has prompted the U.S. Department of Justice to hire a high-profile litigator to look into possible antitrust issues.
Google in recent days stepped up its defense of the partnership as criticism mounted that it would result in Google having a monopolistic hold on online advertising. Google maintains that the deal would not result in huge advertising cost increases or lead to a monopolistic hold on the online search advertising market.
For its part, Yahoo earlier today launched a new digital advisory council to help it answer some of the questions that its advertisers have concerning the proposed deal.
Read more about E-business in Computerworld's E-business Topic Center.
- 15 Non-Certified IT Skills Growing in Demand
- How 19 Tech Titans Target Healthcare
- Twitter Suffering From Growing Pains (and Facebook Comparisons)
- Agile Comes to Data Integration
- Slideshow: 7 security mistakes people make with their mobile device
- iOS vs. Android: Which is more secure?
- 11 sure signs you've been hacked
- EDI in China: Developing a Strategy for B2B Integration Success IBM solutions for EDI have helped companies across the globe securely connect and build partner communities.
- Is Your Big Data Solution Production-Ready? Read "Is Your Big Data Solution Production-Ready?" now, and discover best practices and actionable steps to implementing a production-ready big data solution.
- Pay-as-you-Grow Data Protection: IBM Tivoli's Full-featured Data Protection Suite for Small to Medium Businesses IBM Tivoli Storage Manager Suite for Unified Recovery gives small and medium businesses the opportunity to start out with only the individual solutions...
- Streamline Data Protection with IBM Tivoli Storage Manager Operations Center IBM Tivoli Storage Manager (TSM) has been an industry-standard data protection solution for two decades. But, where most competitors focus exclusively on Backup...
- Polycom Virtual Meeting Rooms Video The conference room is the hub for group collaboration. With Polycom, you can extend the productivity and efficiency benefits of face-to-face meetings beyond...
- Webinar: Building a Big Data solution that's production-ready Big data solutions are no longer just a nice-to-have. All E-business White Papers | Webcasts