European Commission Inspecting Google/Yahoo Ad Tie-Up

The European Commission has announced it is conducting a preliminary investigation into Google’s and Yahoo’s proposed ad tie-up. The deal, should it go ahead, will allow Google to run its ads against Yahoo search results.

Competition Commissioner Neelie Kroes’ spokesperson, Jonathan Todd, told Reuters yesterday it has begun a “preliminary investigation” into the agreement’s potential effects on competition within the European Economic Area (EEA). The investigation began in mid-July, Todd said, and has no official deadline.

Speaking with ClickZ News in early July, the commission said it had not received official notification from either Yahoo or Google regarding the transaction, but that “It is always the responsibility of parties involved in a merger transaction to notify the Commission if it meets the criteria of the EU Merger Regulation.”

At the time, a Yahoo spokesperson said that although the agreement does not cover Europe, it had “provided information” about it to officials. Google simply said, “The deal only applies to Yahoo’s U.S. and Canadian Web properties, so we do not expect the European Commission to review the arrangement.”

The commission only has jurisdiction to investigate the arrangement if it affects trade between EU Member States.

The U.S. Department of Justice currently is conducting an investigation into the deal, and has reportedly hired prominent antitrust lawyer, Sanford Litvack, to help. The U.S. Congress has also shown interest in the partnership.

In addition, the Association of National Advertisers, and the World Association of Newspapers have both voiced opposition to the deal. Ad trade body, the ANA, argued the partnership will “diminish competition, increase concentration of market power, limit choices currently available and potentially raise prices to advertisers for high quality, affordable search advertising.”

The WAN raised similar concerns surrounding the deal yesterday, stating it will help solidify Google’s dominance of the online ad industry, and hurt publishers as a result.