Inside Google

Santa Monica CA — The proposed 10-year partnership on Internet search and search advertising between Microsoft and Yahoo! must be closely scrutinized by the Federal Trade Commission and the Justice Department to ensure there are no antitrust violations and that user privacy is guaranteed, Consumer Watchdog said today.

The Microsoft-Yahoo! deal is an opportunity to set to the gold standard for privacy guarantees by Internet companies and for the government to use its leverage to obtain it, Consumer Watchdog said.

Under the proposed deal Yahoo! would use Microsoft’s search engine, Bing, and sell ads that are delivered with search results. Internet giant Google currently has 65 percent of the search market in the United States. Microsoft and Yahoo! total 28 percent. Some have suggested that the combination of the two smaller search businesses would offer stronger competition to Google.

“Whenever competitors combine, serious antitrust issues are raised. Those issues need to be resolved to the satisfaction of the Justice Department as well as European regulatory authorities,” said John M. Simpson, an advocate with Consumer Watchdog. “Even more important are questions about users’ personal data, how it is collected, stored and shared.  The Federal Trade Commission must ensure that consumers have control of information about them and that privacy guarantees are enforced.”

Consumer Watchdog said that the business model of Internet search advertising companies is to gather as much information on users as possible and to use the data to target advertising. Most consumers are unaware of the amount of data about them that is gathered.

“If the result of this deal is that there are two stronger Internet search enterprises who exploit users’ data at the expense of their privacy rights, consumers are worse off, not better,” said Simpson. “Users must have control of their data — whether it is collected and how it is used.  Guarantees of that control must be in place before this deal is approved. Justice and the FTC can — and must — insist on this.”

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Consumer Watchdog, formerly the Foundation for Taxpayer and Consumer Rights is a nonprofit, nonpartisan consumer advocacy organization with offices in Washington, DC and Santa Monica, CA.  Our website is www.ConsumerWatchdog.org.