E.U. Probing Yahoo/Google Ad Deal

Sam Gustin writes: The pressure is building on Yahoo's controversial search ad partnership with Google.

European Union antitrust regulators have joined their U.S. Justice Department counterparts in probing the deal, as a global newspaper trade group voiced its opposition to the partnership.

The review, which an E.U. spokesman said is currently informal, could lead to a full-blown investigation of the tie-up by the E.U.'s Competition Commission.

"The European Commission is looking at possible effects of the Yahoo/Google agreement on the European Economic Area market in relation to EC Treaty rules on restrictive business practices," E.U. spokesman Jonathan Todd told the L.A. Times.

For its part, Google has maintained that its deal with Yahoo is beyond the E.U.'s jurisdiction.

"The agreement is limited in scope to Yahoo's and Google U.S. sites, and it will not have any significant effect on Europe,'' Google spokesman William Echikson told Bloomberg. "We are, of course, cooperating with the Commission and are confident they will reach the same conclusion.''

The news of the E.U.'s investigation came on the same day that a global newspaper group has added its voice to the growing chorus opposing the deal.

The World Association of Newspapers, which represents 18,000 titles worldwide, has asked the U.S. Department of Justice, the European Commission, and Canada's antitrust authority to block the deal, saying it would give Google to much power in the ad market.

"W.A.N. strenuously opposes Google's attempt to take over a portion of Yahoo's content advertising and syndicated search business," the group said in a statement. "Competition between both these two search companies has provided a necessary check to any potential market abuses, and has helped to ensure that publishers and content generators are capable of earning an equitable and fair return on their content."

Earlier this month, The Association of National Advertisers wrote a letter to Justice Department regulators expressing its opposition to the deal.

The A.N.A argued that the Google-Yahoo pact "will control 90 percent of search advertising inventory and...will likely diminish competition, increase concentration of market power, limit choices currently available and potentially raise prices to advertisers for high quality, affordable search advertising."

The Justice Department has hired well known antitrust ace Sandy Litvack to consult on its own probe of the deal, a move experts suggested might mean the the agency is preparing to sue to block the deal.

Several states, including California, Connecticut, and Florida are also eying the tie-up.