Silicon Valley Politicians Warn Against Google-Yahoo Lawsuit

A group of House Democrats from California hopes the Department of Justice goes easy on Google and Yahoo. Eleven California Democrats, many of whom represent regions around the Silicon Valley area, sent a letter late last week to U.S. Attorney General Michael Mukasey, urging his department to steer clear of a “preemptive lawsuit” blocking Yahoo’s search advertising deal with Google.

“If such action were taken, we believe such an unprecedented suit could detrimentally affect the online advertising market and electronic commerce,” noted the missive, signed by Democrats Anna Eshoo and Doris Matsui, both members of the House Energy and Commerce Committee, which has jurisdiction over online ad industry matters.

Eshoo also represents California’s 14th congressional district, which includes Google’s hometown of Mountain View and Yahoo’s Sunnyvale HQ.

The California delegation noted similar points to those used by Google and Yahoo in their own defense of the imminent partnership.

“The agreement is not a merger and therefore does not grant exclusive control of online advertising to either Yahoo or Google,” stressed the letter.

In July, the DOJ confirmed it was “looking at the proposed transaction,” noting the inspection involved questions of competition. The department has not publicly stated whether or not it will pursue a lawsuit; however, it’s been reported that the DOJ hired an outside litigator, Sanford Litvack, to look into Google’s activities.

Since the two firms announced the pact, it has been subject to Senate and House inspection. In particular, U.S. Senator Herb Kohl, a Wisconsin Democrat, has expressed concern about the deal’s effects on competition. Republican U.S. Rep. Joe Barton of Texas also publicly voiced worries regarding competition and consumer privacy in relation to the partnership.

A host of advertiser, publisher, and advocacy groups also have expressed concern about the search ad agreement. Despite the barrage of scrutiny, Google CEO Eric Schmidt recently confirmed the company’s plan to implement the deal in October.

“Similar agreements are commonplace in many industries and standard among Internet companies,” stated the letter from the California Democrats. Noting that blocking the deal could stifle competition, growth, and innovation, it continued, “If the DOJ blocks this agreement we fear that the threat of additional scrutiny may chill future agreements.”

Other U.S. House members who signed the September 26 letter and represent Silicon Valley area districts include Zoe Lofgren, Sam Farr, Mike Honda, Jackie Speier, and Ellen Tauscher.

According to the Center for Responsive Politics, the largest portion of campaign donations in 2007/2008 for Congresswomen Eshoo and Lofgren came from computer and Internet firms. Additional U.S. Representatives from California who signed the letter are Mike Thompson, George Miller, and Barbara Lee, along with Lynn Woolsey, who sits on the House Science and Technology Committee.

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