Google And Yahoo Negotiating With Justice Department Over Antitrust

from the trying-to-avoid-a-lawsuit dept

With the Justice Department making it clear that it wanted to go after Google for possible antitrust violations, it appears that Google has recognized the time isn't right to be defiant, but to get a seat at the negotiating table. The company, along with Yahoo, is apparently in talks with the Justice Department to see what it can do to avoid getting sued for antitrust violations. While it's obviously way too early to see whether or not this works, it must be better than waiting until the whole thing gets hashed out in court. It's still difficult to see what sort of antitrust violation there really is here, but that wouldn't stop the government from bringing a costly lawsuit if some sort of deal isn't worked out quickly.


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  1.  
    identicon
    Willton, Oct 14th, 2008 @ 5:27pm

    Can't see a potential violation?

    It's still difficult to see what sort of antitrust violation there really is here,

    Try Section 7 of the Clayton Act, 15 U.S.C. 18.

     

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  2.  
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    No sixpack, Oct 14th, 2008 @ 5:48pm

    Re: Can't see a potential violation?

    Care to elaborate ?

     

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  3.  
    identicon
    Willton, Oct 14th, 2008 @ 5:55pm

    Re: Re: Can't see a potential violation?

    15 U.S.C. Section 18

    "No person engaged in commerce or in any activity affecting commerce shall acquire, directly or indirectly, the whole or any part of the stock or other share capital and no person subject to the jurisdiction of the Federal Trade Commission shall acquire the whole or any part of the assets of another person engaged also in commerce or in any activity affecting commerce, where in any line of commerce or in any activity affecting commerce in any section of the country, the effect of such acquisition may be substantially to lessen competition, or tend to create a monopoly."

     

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  4.  
    identicon
    Matt, Oct 14th, 2008 @ 5:59pm

    Re: Can't see a potential violation?

    uh what?

    Said mentioned section = Section 7 of the Clayton Act, 15 U.S.C. 18. =
    http://www4.law.cornell.edu/uscode/html/uscode15/usc_sec_15_00000018----000-.html
    (copy onto one line)

    All that says is, you can't create a monopoly. Google is not a monopoly, even if they own yahoo. What the hell are you talking about? Also, unless Microsoft sues them for this(which they will lose on a variety of levels) what is the FTC going to do? google and yahoo are by far not the only folks in the SEO business.

     

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  5.  
    identicon
    Willton, Oct 14th, 2008 @ 6:00pm

    Re: Re: Can't see a potential violation?

    According to the article, Google has a 71% search market share, while Yahoo has a 18.26% search market share. Do the math.

    If a merger of those two does not have a substantial potential to "lessen competition" or "tend to create a monopoly," then you're going to have to explain to me how.

     

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  6.  
    identicon
    matt, Oct 14th, 2008 @ 6:01pm

    Re: Re: Re: Can't see a potential violation?

    I will also add in a direct reply absolutely nothing is preventing competition. Unlike patented research nothing is stopping anyone from making a new search engine and completely crushing google. Just enough brilliant minds haven't come up with a way. Even google would welcome new competition.

     

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  7.  
    identicon
    Willton, Oct 14th, 2008 @ 6:04pm

    Re: Re: Can't see a potential violation?

    All that says is, you can't create a monopoly.

    No, it says that you can't enter into an acquisition of stocks or assets that would "tend to create a monopoly" or "lessen competition." By no means must there be a certain monopoly. The case law says so plainly.

     

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  8.  
    identicon
    Willton, Oct 14th, 2008 @ 6:05pm

    Re: Re: Re: Re: Can't see a potential violation?

    I will also add in a direct reply absolutely nothing is preventing competition.

    You don't have to prevent competition in order to run afoul of Section 7. You merely have to lessen it.

     

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  9.  
    identicon
    no sixpack, Oct 14th, 2008 @ 6:20pm

    Re: Re: Re: Re: Re: Can't see a potential violation?

    "You don't have to prevent competition in order to run afoul of Section 7. You merely have to lessen it."

    What a crock, with that definition you could go after just about any business.

     

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  10.  
    icon
    Mike (profile), Oct 14th, 2008 @ 7:54pm

    Re: Re: Re: Re: Re: Can't see a potential violation?

    You don't have to prevent competition in order to run afoul of Section 7. You merely have to lessen it.

    You don't have a serious problem with that definition? How is it a monopoly if competition is still there?

     

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  11.  
    identicon
    Willton, Oct 14th, 2008 @ 8:14pm

    Re: Re: Re: Re: Re: Re: Can't see a potential violation?

    You don't have a serious problem with that definition? How is it a monopoly if competition is still there?

    I am not stating my opinion of the Act. I am merely stating that it is there, and that the Google-Yahoo deal potentially violates it. Given that, I don't see how "[i]t's still difficult to see what sort of antitrust violation there really is here."

    That said, one does not need to have a full-blown monopoly in order to act like a monopolist. One need only have and exert market power, usually by raising prices and reducing output, to do so. Section 7 of the Clayton Act was designed to nip horizontal mergers that have this potential in the proverbial bud.

    Perhaps you need to brush up on your antitrust law.

     

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  12.  
    identicon
    No Sixpack, Oct 14th, 2008 @ 8:29pm

    Re: Re: Re: Re: Re: Re: Re: Can't see a potential violation?

    "Perhaps you need to brush up on your antitrust law."

    and with that remark, you are claiming to be an expert in the field ?

    Your claim is weak, simply because it could be applied across most any portion of the business landscape.

    Oh look, antitrust everywhere ! Run !

     

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  13.  
    identicon
    Willton, Oct 14th, 2008 @ 8:56pm

    Re: Re: Re: Re: Re: Re: Re: Re: Can't see a potential violation?

    and with that remark, you are claiming to be an expert in the field ?

    No, but I do claim to know a bit in the field, which is apparently more than you.

    Your claim is weak, simply because it could be applied across most any portion of the business landscape.

    Hardly. First, this is not my claim; it is the law. Second, this law only applies to mergers, not to companies by themselves. Third, many mergers have the potential to increase competition, as they would allow the resultant firm to increase efficiencies and lower costs, thus giving it an increased ability to compete with others in the market. So I fail to see how this law "could be applied across most any portion of the business landscape."

    As for Google and Yahoo, again, one would have to explain to me how the merger of two giants in the field, the result of which would produce an 89% market share in one firm, would have the potential to do anything but lessen competition.

     

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  14.  
    identicon
    Jon, Oct 14th, 2008 @ 9:08pm

    Re: Re: Re: Re: Re: Re: Can't see a potential violation?

    So Microsoft was never a monopoly by that measure. Google's 90% would be substantially higher than Microsoft's 80-85%...

    I never thought so, but I suspect that a number of posters defending Google did.

     

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  15.  
    identicon
    Matt, Oct 15th, 2008 @ 6:37am

    Re: Re: Re: Re: Re: Re: Re: Re: Re: Can't see a potential violation?

    When someone stifles competition is different than simply doing better than their competition.

    Show me something google is doing that is impacting the search engine market negatively and it'd probably be a false report.

    Claiming that it's because of the law is not a critical understanding. It neither creates a monopoly, nor does it stifle or lessen competition. Lessening competition is like claiming felony interference of a business model and I'm sure Mike or anyone (as clearly techdirt readers are pretty smart) could vouch for how that one doesn't exist.

    You could create a search engine and compete today if you want. There is no artificial barriers for any company to create one, not even bandwidth. You could reasonably start with a single PC and go from there.

     

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  16.  
    identicon
    Anonymous Coward, Oct 15th, 2008 @ 11:06am

    Re: Re: Re: Re: Re: Re: Can't see a potential violation?

    "You don't have a serious problem with that definition? How is it a monopoly if competition is still there?"

    Perhaps you should direct your question to the Anti-Trust Division of the Department of Justice.

    The fact of the matter is that Wilton is correct and the DOJ will have a major say in a Google/Yahoo deal moving forward.

     

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  17.  
    identicon
    Chris, Oct 15th, 2008 @ 1:46pm

    THINK

    You guys need to understand what you are talking about before you start commenting. Google isn't merging with Yahoo! and this whole thing has nothing to do with search engine market shares. This is about Yahoo signing a deal with Google to have Google take over Yahoo's advertising. Yahoo still makes a cut of it, but it also increases Google's market share in this field greatly. THAT is what the DOJ is looking at.

    Ugh, and these are the people who will be voting...

     

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