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The World Association of Newspapers has asked competition authorities in Europe and North America to block an advertising agreement between Google and Yahoo on anti-competitive grounds, saying the deal would have a negative impact on the advertising revenues that the search giants provide to newspaper and other websites, and on the cost of paid search advertising.
WAN, which represents 77 national newspaper associations and 18,000 newspapers world-wide, called on the Antitrust Division of the United States Department of Justice, the European Commissionís Competition Directorate, and the Competition Bureau of Canada to examine the impact of the agreement and to block the deal.
Sounds like an anti-competitive effort by the World Association of Newspapers
None of their members control market shares anywhere close to that of Google - 70% in USA, 90% in UK - if Google effectively extends its reach over 20% of Yahoo (USA) share then this will certainly reduce rather than increase competition and create new Microsoft (if it has not already been created).
Local monopolies are reality however they don't have global effect - if Google is the must have advertising platform (like it is now already) then any action by them (like decide to refuse someone use AdWords or AdSense) would have fatal consequences to the businesses that have to use them because of their dominant market position.
if Google effectively extends its reach over 20% of Yahoo (USA)
lord - so that is the deal? yahoo is only outsourcing up to 20% of certain search queres to google...or maybe its 20% of all their search results to google?
[edited by: lawman at 11:00 am (utc) on Sep. 16, 2008]
[edit reason] fix quote [/edit]
so that is the deal?
They are starting small to avoid anti-trust action, but you can be sure that if the deal is profitable Yahoo will extend it to other areas - this way they can cut down costs of developing products etc. Frankly even 70% market share is way too high - in the UK Google controls 90% of searches.
Maybe this is an attempt to get the attention of legislators who depend on the newspapers for free publicity, and who can't look to Google for the same.
In the U.S. at least, antitrust law is designed to benefit the customer, not to maintain the competitors at a level of income to which they have been accustomed.
So anti-trust laws did not support Netscape's case against Microsoft?
The consumers never benefit from monopolies in a long run - those monopolies always end up abusing their position.
There were several differences between the Microsoft case and this. One is, of course, that Microsoft stood directly accused of actions designed to prevent its competitors from reaching markets. Google isn't hiring goons to beat up paperboys, which is what Microsoft was doing.
Another is that Google doesn't have a monopoly by any reasonable definition. In search itself, Microsoft has a well-funded (if not well-implemented) engine: and there is no barrier at all to keep people from switching (in fact, any barriers go the other way.) In online advertising, any idiot with FontPlague can go into the business, without Google's knowledge or permission. In _search_ advertising (the artificially restricted definition of market being bandied about in this context--as if advertising on a search result page is somehow different from advertising on any of the other umpteen gazillion pages on the web!), Google creates a market. But even here it's just as ludicrous to talk about a Google monopoly on advertising, as it would be to talk about the New York Stock Exchange monopoly on cars (after all, the NYSE is the broker for most GM stock exchanges!)
Consumers are benefited by a large number of SUPPLIERS but a much smaller number of MARKETS: and the ideal situation for a consumer would be to walk into one market (say, the Chicago Board of Trade) and have instant comparative access directly to the suppliers.
The bizarrely defined "market" the newspapers are whining about, is expecially surreal in that it's a market they aren't in, and won't ever be in, because the pulped-tree-bark-inking industry doesn't have and won't ever have the technology to CREATE search pages!)
Illegal activities related to suppressing browser competition was one of the highlights of the anti-trust case against Microsoft
In my view this was the key part of the case. However Microsoft got done not for that but for browser bundling - something that I consider perfectly legitimate. That was a big mistake by prosecutors which allowed Microsoft to pretty much win the appeal.
Another is that Google doesn't have a monopoly by any reasonable definition.
What's your definition of monopoly? In UK for example in highly competitive supermarket industry getting market share of 40% would certainly lead to anti-trust action. Google has got 90% (!) of UK searches, 70% in the US and tie-up with Yahoo would extend their reach greatly.
More importantly Google only started doing this when Microsoft tried to bid for Yahoo, this deal has got clear overriding anti-competitive objective - prevent Microsoft from becoming a stronger competitor. That alone should have been enough to stop the deal at least until the point when it is decided whether Microsoft buys Yahoo or not, this deal was used to block that deal. Google is playing for time here by engaging into something they know perfectly well is anti-competitive and likely to be blocked, but it will take probably years for that to happen (if they resist which I think they will), just another "do no evil" thing.