On Tuesday 15 July 2008, the US House Judiciary
Committee Task Force on Competition Policy and Antitrust Laws
held a hearing into competition on the internet, focusing on the
Google/Yahoo! deal.
Despite the huge importance of this deal for the future
of online advertising and for innovation on the web generally,
very little is known about its terms.
ICOMP notes that Yahoo! have notified the European
Commission of their partnership with Google and calls upon all
the relevant authorities in Europe to undertake the necessary
investigations both as to the form and content of the agreement
between Google and Yahoo! as well as a detailed analysis of its
possible effects.
The Chairman of the hearing on Tuesday, Democrat
Representative John Conyers, Jr. asked
we
need to ask why is it that the members of this committee cannot
be trusted to see the signed agreement. And we were
offered access to the agreement, but only if we viewed it at a
law firm with no notes allowed and a signed non-disclosure
agreement. By contrast, the committee was
given more ready access to the documents surrounding the
President's terrorist surveillance program.
ICOMP finds it deeply unsatisfactory that an
arrangement between parties which between them command some 90%
of the relevant market is kept secret. Confidence as to
the intentions of Google is deeply harmed by such opaqueness.
ICOMP also questions why Google and Yahoo! were so
unforthcoming when asked by Republican Representative Steven
Chabot why the deal had been limited to the U.S. and Canada.
Yahoo!'s response was that
The parties had agreed at this time for U.S. and Canada, and I
think, without speaking for Mr. Drummond [Google's Senior Vice
President of Corporate Development and Chief Legal Officer], if
there was a future opportunity to work together that's something
that might be considered, but that's where the negotiations
ended up this time.
Given the importance of search and online advertising
for the future development of the internet in Europe, ICOMP
calls upon Google and Yahoo! to provide much greater clarity as
to their intentions in Europe.
ICOMP welcomes the fact that the hearing focused on the
broader picture which emerges as questions are raised about the
likely effects of this deal. Quite rightly, they
repeatedly stressed that the key issues are long-term
competition and innovation in this vital area of activity.
The same is true in Europe and the fact that the deal
is for now limited to search advertising in the
US
and Canada
does not change the overwhelming conclusion that its effects
will be felt as much in Europe as elsewhere. Accordingly, ICOMP calls upon
all the relevant authorities in Europe
to undertake the necessary investigations both as to the form
and content of the agreement between Google and Yahoo! as well
as a detailed analysis of its possible effects.
For further comment please contact:
Auke Haagsma, ICOMP Director, +32 (0)2 767 8242