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Press Release

Consumer Watchdog Calls On Feds To Get User Privacy And Antitrust Guarantees In Proposed Microsoft-Yahoo! Deal

CONTACT: 310-392-0522 ext. 317 or cell 310-292-1902

Wed, Jul 29, 2009 at 11:41 am

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Santa Monica CA — The proposed 10-year partnership on Internet search and search advertising between Microsoft and Yahoo! must be closely scrutinized by the Federal Trade Commission and the Justice Department to ensure there are no antitrust violations and that user privacy is guaranteed, Consumer Watchdog said today.

The Microsoft-Yahoo! deal is an opportunity to set to the gold standard for privacy guarantees by Internet companies and for the government to use its leverage to obtain it, Consumer Watchdog said.

Under the proposed deal Yahoo! would use Microsoft’s search engine, Bing, and sell ads that are delivered with search results. Internet giant Google currently has 65 percent of the search market in the United States. Microsoft and Yahoo! total 28 percent. Some have suggested that the combination of the two smaller search businesses would offer stronger competition to Google.

“Whenever competitors combine, serious antitrust issues are raised. Those issues need to be resolved to the satisfaction of the Justice Department as well as European regulatory authorities,” said John M. Simpson, an advocate with Consumer Watchdog. “Even more important are questions about users’ personal data, how it is collected, stored and shared.  The Federal Trade Commission must ensure that consumers have control of information about them and that privacy guarantees are enforced.”

Consumer Watchdog said that the business model of Internet search advertising companies is to gather as much information on users as possible and to use the data to target advertising. Most consumers are unaware of the amount of data about them that is gathered.

“If the result of this deal is that there are two stronger Internet search enterprises who exploit users’ data at the expense of their privacy rights, consumers are worse off, not better,” said Simpson. “Users must have control of their data — whether it is collected and how it is used.  Guarantees of that control must be in place before this deal is approved. Justice and the FTC can — and must — insist on this.”

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Consumer Watchdog, formerly the Foundation for Taxpayer and Consumer Rights is a nonprofit, nonpartisan consumer advocacy organization with offices in Washington, DC and Santa Monica, CA.  Our website is www.ConsumerWatchdog.org.

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This post was written by:

John M. Simpson

- who has written 363 posts on Inside Google.

John M. Simpson is a leading voice on technological privacy and stem cell research issues. His investigations this year of Google’s online privacy practices and book publishing agreements triggered intense media scrutiny and federal interest in the online giant’s business practices. His critique of patents on human embryonic stem cells has been key to expanding the ability of American scientists to conduct stem cell research. He has ensured that California’s taxpayer-funded stem cell research will lead to broadly accessible and affordable medicine and not just government-subsidized profiteering. Prior to joining Consumer Watchdog in 2005, he was executive editor of Tribune Media Services International, a syndication company. Before that, he was deputy editor of USA Today and editor of its international edition. Simpson taught journalism a Dublin City University in Ireland, and consulted for The Irish Times and The Gleaner in Jamaica. He served as president of the World Editors Forum. He holds a B.A. in philosophy from Harpur College of SUNY Binghamton and was a Gannett Fellow at the Center for Asian and Pacific Studies at the University of Hawaii. He has an M.A. in Communication Management from USC’s Annenberg School for Communication.

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