EU to probe Google/Yahoo alliance

European regulators have confirmed that they are investigating the online advertising deal brokered between Google and Yahoo. The US Department of Justice is already probing the alliance, which will allow Google to sell advertising on its rival’s website in return for a share of the profits.

A spokesman for European Union Competition Commissioner Neelie Kroes says that an inquiry into the $800m (£445m) agreement is already underway.

The Google-Yahoo deal, which is primarily in the US, was announced the June, however the EU has opened a preliminary investigation into the potential effect of the agreement in the European Economic Area. There is no deadline for the investigation to conclude.

The US Department of Justice last week confirmed it was investigating the alliance, examining allegations that it is anti-competitive.

Yahoo says it will cooperate fully with European investigators, although Google says the terms of its deal will have no impact on the European advertising market. It says in a statement: “The agreement is limited in scope to Yahoo’s US and Canadian websites, and it will not have any significant effect on Europe.

“We are, of course, cooperating with the commission and are confident that they will reach the same conclusion.”

Advertising and media groups have criticised the tie-up, arguing that it hands an unfair amount of control over the online advertising market to a single company.