Consumer Group Says Department of Justice Needs to Scrutinize Google/Yahoo Partnership

With Google’s Dominance in Online Search and Advertising, Deal Raises Serious Concerns for Consumers

 

Washington, DC, October 20, 2008 — As the Department of Justice moves closer to deciding whether to take action to block the partnership between Google and Yahoo, or impose conditions on the deal, the American Consumer Institute Center for Citizen Research (ACI) reiterated their previous concerns about the deal.

 

“We previously raised concerns about the growing market share and dominance of Google,” said Steve Pociask, president of ACI.  “Google’s high market share, high profits and potential for anticompetitive conduct poses a major risk for the industry and consumers.  However you look at it, the market for search advertising is dominated by Google, and one-time rivals appear to be resigned to use Google’s advertising and search features.  This suggests that the market may have irreversibly tipped to Google and there is insufficient competition to challenge the market.” 

 

“The partnership between Google and Yahoo has only increased those concerns,” added Pociask.  “If allowed to proceed, this deal would by some estimates give Google over 90% of the search advertising market.

 

“Allowing the top two competitors in the online search market to combine would limit choices for consumers and raise online advertising rates for consumers,” Pociask concluded.  “Government regulators need to take action before this deal goes through to encourage more competition in this industry, not less.”

 

An ACI ConsumerGram in May of this year took a closer look at the ramifications of this deal.  To retrieve their ConsumerGram or The document is available at www.theamericanconsumer.org.

 

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