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EU to investigate Yahoo-Google deal

Latest update : 2008-09-17

A proposed online-advertising deal between Internet giants Yahoo and Google is to be scrutinised by EU competition regulators. The World Association of Newspapers has already denounced what it calls an anti-competitive agreement.

The EU's top competition regulator has opened an investigation into a proposed online advertising tie-up between Internet giants Google and Yahoo, a spokesman said Tuesday.

"This is an agreement between two of the major players on the Internet; clearly we are being prudent" in opening the probe, said Jonathan Todd, spokesman for EU Competition Commissioner Neelie Kroes.

"We don't know whether there is a problem; we are looking at it in case there is," he said of the preliminary investigation which was launched in July.

"We are looking at whether the merger may have some anti-competitive effects in the European area," he added.

Google and Yahoo say the deal is limited to Web properties in the United States and Canada but Google has said there is potential to extend it to other parts of the world.

The World Association of Newspapers (WAN) is asking competition authorities in both North America and Europe to block the advertising deal on anti-competitive grounds.

The Paris-based association said the deal "would have a negative impact on the advertising revenues that the search giants provide to newspaper and other Web sites, and on the cost of paid search advertising.

"WAN believes that the competition that currently exists between Google and Yahoo is absolutely essential to ensuring that our member titles receive competitive returns for online advertising on their sites, and for obtaining competitive prices when they purchase paid search advertising," it said in a statement.

EU commission spokesman Todd said "we are receiving cooperation from both companies" in the Brussels probe.

The enquiry is similar to one which the US Department of Justice launched in July to ascertain whether the deal would stifle competition.

Companies found to be in breach of EU competition rules may face fines equalling up to 10 percent of their revenues.

Date created : 2008-09-16

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