Privacy groups vow to fight Microsoft-Yahoo deal

Privacy groups are promising a fight before U.S. regulatory agencies if Microsoft's
offer to buy Yahoo for $44.6
billion is accepted, and the deal could face significant hurdles in Europe as
well.

Microsoft announced that it sent an offer to Yahoo's board of directors on
Thursday, going public with the news Friday morning. Immediately, the executive
directors of the Center
for Digital Democracy (CDD) and the Electronic
Privacy Information Center (EPIC) said the acquisition would raise serious
privacy concerns.

CDD will press the U.S. Department
of Justice, the Federal Trade
Commission and Congress to "scrutinize this deal and impose the needed
safeguards for it -- and the industry," said Jeffrey Chester, CDD's executive
director. CDD and EPIC tried to stop Google's
proposed acquisition of online ad service DoubleClick
on privacy grounds before the FTC last year, but the FTC approved the deal in
December.

The Microsoft-Yahoo deal, if consummated, would "create a powerful interactive
Internet duopoly in online media," Chester said. "Google and Microsoft
will have inordinate power to shape 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."

The proposed deal also underscores a need for new laws or regulations that
protect consumer data, Chester added. "In an era when individuals are increasingly
conducting their personal, social and political lives online, the corporations
that control the digital experience will have a far-reaching influence over
every aspect of society," he said. "Consumers will be more vulnerable
to having their personal information become the property of the GoogleClick's
and Microhoo's."

But the DOJ and FTC may have little grounds to oppose a Microsoft/Yahoo merger,
said Professor Keith Hylton, who specializes in antitrust issues at the Boston
University law school. While Microsoft and Yahoo compete in some areas, Microsoft
could argue this a "vertical" merger that largely expands its online
services, but largely doesn't eliminate competition, he said.

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