Dominant Online Firm Arrangements Could Implicate Antitrust Concerns

WASHINGTON, April 10 /PRNewswire-USNewswire/ -- The Washington Legal
Foundation (WLF) today noted that antitrust regulators are likely to intensify
their scrutiny of strategic arrangements or other business agreements which
involve online commerce, particularly those which involve firms holding
dominant market shares.

One recent development which could implicate such antitrust scrutiny, WLF
stated, involves a recently announced test run of a search advertisement
outsourcing arrangement between search market leaders Yahoo and Google.

Published reports indicate that Yahoo would be engaging in a two-week test of
"Google Inc.'s AdSense for Search service, which will deliver relevant Google
ads alongside Yahoo's own search results." Such an arrangement has been a
subject of conversation and media discussion in recent months as Yahoo, which
currently holds the number two position in the online search query market, has
been examining various business opportunities to increase the company's value
and boost revenue.

"Any kind of combination between a dominant market leader and the company with
the second largest market share will implicate antitrust concerns," said
Glenn G. Lammi, Chief Counsel of WLF's Legal Studies Division. "Two companies
need not merge their full functions in order to run afoul of competition laws.
Even an outsourcing agreement like the one being tested, whether it's done all
at once or implemented in phases, could be suspect under the Sherman Antitrust
Act."

At least one key federal policy maker, Senator Herbert Kohl who chairs the
antitrust subcommittee in the Senate Judiciary Committee, has noted he is
keeping an eye on the test run and its potential impact on competition. Even
if such an arrangement could secure the approval of U.S. antitrust officials,
Lammi noted that competition authorities in other prominent markets, such as
Europe, are even more likely to give it greater scrutiny.

Washington Legal Foundation is a national, non-profit, public interest law and
policy center. By utilizing a unique approach to forward its mission --
publishing timely legal studies, engaging in innovative litigation, and
communicating directly to the public -- WLF has become the nation's most
effective legal advocate of free enterprise.

SOURCE Washington Legal Foundation

Glenn Lammi of Washington Legal Foundation, +1-202-588-0302