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Consumer group opposes Google, Yahoo partnership

WASHINGTON, Oct 28 (Reuters) - US Public Interest Group, a consumer organization, is opposing Google's GOOG.O plan to share advertising with rival Yahoo YHOO.O, saying it could harm consumer privacy, according to a letter sent to the U.S. attorney general, a copy of which was given to Reuters.

U.S. PIRG argued that advertisers who try to compete with Google and Yahoo, which together have more than 80 percent of the search advertising market, will be forced to collect more information on Internet users because they would not be able to compete with the market leaders on price.

The result would be a loss of privacy for consumers, the group said.

“The proposed agreement induces the remaining paid search advertising outlets to resort to privacy invasive techniques which harms consumer privacy online and thus threatens online discourse in general,” US PIRG said in a letter sent to U.S. Attorney General Michael Mukasey dated Oct. 22.

Because of Google’s dominance of the search market -- Yahoo is No. 2 -- many advertisers oppose a plan the two announced in June that would allow Yahoo to place Google ads on its web site. This revenue sharing agreement could net Yahoo $800 million a year.

The deal was initially seen as an attempt by Yahoo to fend off Microsoft.

“Google’s success must not be allowed to morph into monopoly power. Absent new information about this deal, we believe the Justice Department should protect consumers and stop this transaction from happening,” US PIRG said in the letter.

Google and Yahoo are awaiting the result of an assessment of the deal by the U.S. Justice Department’s antitrust division before implementing it. (Reporting by Diane Bartz)