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EC Still Researching The Microsoft/Yahoo Partnership

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In a change of pace regarding the EC (European Commission) and their view of competition the early returns are that the partnership between Yahoo and Microsoft will not be given a difficult time gaining approval. While the EC has been a stumbling block to other deals including both companies in the past (Yahoo’s previous issue was when there was the propsect of a Google / Yahoo partnership – having Google attached to any competitive issue makes it more interesting for sure). This particular situation doesn’t seem to pose problems although that position has not been officially stated by the EC itself. ClickZ reports

A spokesperson for the European Commission — the branch responsible for anti-trust scrutiny in the E.U. — said last week that it “has not been informed about the details of the transaction,” and that it “keeps this sector, as others, under review, but cannot comment further at this stage.” However, Christopher Thomas, a Brussels-based competition partner at law firm Lovells, told ClickZ that Microsoft and Yahoo now “appear to be in discussion with the Commission about the deal.”

The EC will take this position, of course, because there is so much to look at which requires time and more information. What is interesting is how various legal eagles and pundits are looking at this and predicting that there should be no problems. Why? Because the impact on the competitive environment in Europe posed by this partnership will be nominal at best.

Ouch. Two of the biggest names in the Internet and technology space combine forces in a way that is significantly different that ever before and it barely merits a hiccup in Europe?

Douglas Lahnborg, Competition Partner at law firm Orrick, Herrington & Sutcliffe, said, “It is inconceivable that the deal would be blocked by the Commission. I don’t see what competition arguments could be raised against it given the parties’ limited market position. Any investigation will be a formality.”

Lahnborg suggested the combined European market share of the two entities — estimated at around 4 percent — would still be too small to raise concerns. “In an industry where the number two and number three players command 20 percent market share each, the deal wouldn’t be allowed to go ahead. But considering Google has around 90 percent of the market, that argument is inconceivable,” he said. “Google has a formidable market position, and this relationship could offer advertisers a credible alternative,” he added.

So the lawyers’ early look at the situation seems to indicate clear sailing when the time comes. Of course, this begs the question of “What will Google do?”. Does anyone think that Google is just going to let this happen without at least causing Microhoo to work for it in both the US and elsewhere? Why do you think Google has lined up its firepower in Washington DC anyway and likely in other parts of the world? For the common good? If the common good is defined as Google’s good then yes. Not that there’s anything wrong with that. It is just business after all, right?

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EC Still Researching The Microsoft/Yahoo Partnership
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