US antitrust group supports Google-Yahoo deal

24 September 2008

Few tie-ups in recent times have given rise to as vigorous reactions as the much-publicised advertising deal signed between internet rivals Google and Yahoo.

Although several interested parties, like competitor Microsoft and certain advertising bodies, have decried the arrangement as akin to a monopoly detrimental to the end-customer, not all reactions have been vituperatively negative. (See: Advertisers opposes Yahoo-Google ad deal; authorities may take antitrust action)

The US Justice Department, for example, which had expressed an investigative interest in the deal, has yet to come out with a negative assessment although it had expressed certain concerns. Now, an antitrust think tank has said that the American government, subject to certain conditions, should approve the deal.

The American Antitrust Institute said the partnership makes it more likely that Yahoo would remain independent, which would maintain competition in the market. However, regulators should reshape the alliance between the two Internet companies to foster its benefits to consumers, while also avoiding its anticompetitive risks.

In addition, Google and Yahoo should be prohibited from setting minimum prices and Yahoo should be prevented from using Google ads in place of its own, the AAI said. Finally, the two companies should share revenue based on a fixed formula per click, preventing Yahoo from being rewarded with a higher share for using more Google ads.

The AAI said that it ''found that the publicly available data, including briefings provided by Yahoo and Google, do not rebut the concerns that the alliance as proposed is anticompetitive.''