Yahoo in trouble over Google deal - Congress examines anti-trust concerns

By Dave Murray @ Thursday, July 17, 2008 12:32 PM

Section - PCs/Internet

Yahoo's bid to see off Microsoft by hatching a deal with Google has resulted in an intervention by the US Congress.

According to Reuter, Congress waded into the escalating fight by demanding to know whether the internet company's advertising partnership with Google was breaking anti-trust rules.

Google, Yahoo and Microsoft have all testified before the Senate and House Judiciary Committees over the agreement that will allow Google to sell some of the ads displayed alongside search results on Yahoo's website. Microsoft complained that the deal would limit competition and raise prices in the online advertising market. Yahoo and Google insisted it would benefit consumers and advertisers.

If Washington scuttles the partnership with Google, Yahoo could find itself under even more pressure to head into some kind of deal with Microsoft after all.

House Judiciary Committe chairman John Conyers asked whether the partnership would be anti-competitive, and Herb Kohl, chairman of the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights, said Congress needed to explore 'whether this agreement will reduce Yahoo to nothing more than the newest satellite in the Google orbit'.

Redmond claimed that Google already controls at least 70 per cent of the market, and that if it signed the deal with Yahoo it would give it another 20 per cent. X

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