October 3rd, 2008
Sen. Kohl: Justice should look closely at Yagoogle deal
Update: Google and Yahoo agree to “briefly” delay the deal to give Justice time to look into it. (New York Times)
Congress continued its poking around in the Google-Yahoo deal with Sen. Herb Kohl (D-WI) calling on the Justice Dept. to give the deal strict scrutiny. In a letter to Justice (PDF), Kohl called for an examination on these issues, among others:
- whether this agreement will lead to higher advertising prices;
- whether search and display advertising are interchangeable and substitutable;
- whether this transaction will strengthen Yahoo as a competitor or perpetuate its decline and even exit from this market;
- whether there are significant barriers to entry impeding new competitors in this market.
If, over time, you determine that Google is gaining a dominant market position as a result of the Google-Yahoo agreement, then we would encourage the Justice Department to intervene to protect competition. Even should you conclude at present that this deal is not contrary to antitrust law, the Department must be sure that this deal never in the future crosses the line into an unacceptable, anti-competitive collaboration among competitors which will harm consumers and advertisers.
