Mozilla, Yahoo sue each other over search deal


Now, Yahoo's parent company, Oath (Verizon), is suing Mozilla for breach of contract.

"Yahoo has suffered and will continue to suffer competitive injury to its business and reputation, among other harm, and Mozilla's material breaches and bad-faith conduct are a substantial factor in causing such harm", the claim states.

In response to the lawsuit by Oath, Mozilla stated: "We recently exercised our contractual right to terminate our agreement with Yahoo based on a number of factors including doing what'd best for our brand, our effort to provide quality web search, and the broader content experience for our users".

"Immediately following Yahoo's acquisition, we undertook a lengthy, multi-month process to seek assurances from Yahoo and its acquirers with respect to those factors", the post by Mozilla chief legal and business officer Denelle Dixon continued. "Indeed, the parties anticipated that key elements of the negotiated deal to provide stability to Mozilla and to offset the high risk that Mozilla was taking by choosing Yahoo Search as the default search provider".

"The terms of our contract are clear, and our post-termination rights under our contract with Yahoo should continue to be enforced". But the move has sparked a legal battle between the browser's developer, Mozilla, and Yahoo. Under the terms of the contract, which were revealed during Yahoo's sale process a year ago, the party that would acquire Yahoo would have to pay Mozilla $375 million annually through 2019.

Mayer was directly involved in the contract discussions with Mozilla, according to the browser maker's complaint. The agreement required Yahoo to continue paying Mozilla $375 million a year through 2019 even if it dropped it as a search partner, according to tech news site Recode, which obtained a copy of the contract. The price tag was reduced by $350 million following an admission to a pair of hacks that exposed over 1 billion accounts.

"Rather than focus on improving the quality of its search product, as Yahoo assured Mozilla it would prior to entering into the deal, Yahoo continually focused on short-term monetization and special events such as the Olympics and the election, at the expense of product quality", Mozilla alleges.

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"Yahoo Search consistently failed to retain users and search volume over time, reducing the potential revenue [for Mozilla] under the Strategic Agreement", added Mozilla. But at the same time, what has to be considered is that while Mozilla's Firefox has a market share of 13 per cent, at the same time, Google's Chrome has a market share of close to 60 per cent.

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