Antitrust Group's Advice On Google/Yahoo Ad Pact: Limit Incentives For Yahoo To Run Google Ads
This story was written by David Kaplan.
Given the name, it's probably not a surprise that the American Antitrust Institute has issued a white paper (PDF) calling the Google/Yahoo (NSDQ: YHOO) ad pact "anticompetitive." But in a glass half-full take, the group does cite some "pro-competitive" benefits to the deal as well. It also has some advice for keeping the deal intact, without skirting antitrust rules.
The partnership, which is being examined by the U.S. Department of Justice for potential antitrust violations, gives Yahoo the option of placing Google (NSDQ: GOOG) ads on its search results. The AAI, which describes itself as non-profit education, research and advocate, wants assurances that the deal won't create "a black hole that swallows up Yahoo, despite Yahoo's intentions to stay in business." The AAI's paper adds that in general, it is more than natural to be concerned about any deal between two such larger players that potentially gives the dominant firm a market share in excess of 90 percent. To avoid crossing the antitrust line, the group suggests:
-- prohibiting Yahoo from using Google ads on organic search results outside North America and on any third party web sites
-- blocking Google and Yahoo from setting minimum bid or reserve prices
-- barring Yahoo from using Google ads when Yahoo clearly has enough to fill the white space surrounding organic search results on its site
-- order that Yahoo's revenue share from each click be constant to ensure that it's not rewarded with a higher share in return for using more Google ads. Release (PDF)
By David Kaplan