Bad blood may color EU view on Microsoft-Yahoo

By Huw Jones

BRUSSELS (Reuters) - Bad blood between the European Commission and Microsoft could affect the EU scrutiny of a bid by the software giant for Yahoo, legal experts said on Friday.

Microsoft has made an unsolicited $44.6 billion offer to buy Yahoo and is confident of winning regulatory approval. Yahoo said its board will evaluate the offer.

Clearance from the European Commission as the EU's top competition regulator would likely be needed for a merger of this size and cross-border impact, though it declined to make any comment on Friday.

Last year, the Commission won a bruising court battle against Microsoft that forced the software giant to comply with a landmark 2004 antitrust decision by the EU executive.

Lawyers said Brussels may welcome increased competition against Google but privacy will be a concern.

"I think it's always difficult going into a deal if you have got a sort of unhappy history in a way with the Commission," Catriona Hatton, a partner at law firm Hogan & Hartson, said.

"It's not the best way to come in with a merger deal," Hatton said.

Hans Friederiszick of ESMT Competition Analysis, part of the Berlin-based international business school, said competition and privacy will loom large for Brussels.