Privacy Groups Ready to Oppose Microsoft Takeover of Yahoo

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Google isn’t the only one concerned about a Microsoft takeover of Yahoo! Inc. After Microsoft announced on Thursday that they had sent a $44.6 billion offer to Yahoo’s board of director, privacy groups are already vowing to fight any such move. This is before the deal even comes under the intense scrutiny of U.S. and European regulatory agencies, where it is expected such a takeover would face significant hurdles.

Immediately following Microsoft’s bid announcement , executive directors at the Center for Digital Democracy (CDD) and the Electronic Privacy Information Center (EPIC) said that the acquisition would raise serious privacy concerns.

Jeffery Chester, Executive Director at CDD, said that they will press the U.S. Department of Justice, Congress, and the Federal Trade Commission to “scrutinize this deal and impose the needed safeguards for it — and the industry.”

The CDD and EPIC don’t necessarily have the greatest track record in stop deals, however. Last year the two organizations opposed Google’s takeover of DoubleClick, a deal which was approved in December by the FTC.

Chester warns that the proposed Microsoft-Yahoo deal would “create a powerful interactive Internet duopoly in online media. Google and Microsoft will have inordinate power to share the online communications marketplace, including journalism, entertainment, and advertising. There are consequences to democratic societies everywhere, as two digital gatekeepers are likely to control how the Internet and other interactive media evolve.”

In Europe, lawyers indicate that deal would have a much harder time of passing. One European antitrust lawyer indicated that if the deal would allow Microsoft to take components of Windows online, and “in the process increases Microsoft’s dominance of the market for PC operating systems,” then the European Commission would be forced to block the deal because European Union merger rules forbid dominant companies from increasing their dominance. Furthermore, the lawyer, who asked to remain unnamed, indicated that they would have to get rid of one of the messaging systems for a deal to go through.

Yahoo has yet to formally accept Microsoft’s offer, although it is clearly an offer that must be considered. If Yahoo fails to take Microsoft up on their offer, then this could just all be pointless speculation and worry.

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