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Microsoft-Yahoo! pact hit with anti-trust question

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Microsoft's chief executive has championed his company's search and advertising marriage with Yahoo! as healthy for individuals and advertisers because it delivers "more credible" competition to Google.

In an interview with TechFlash, Steve Ballmer denied the deal worsens the competitive landscape, with "three competitors going to two."

But one consumer rights group has dismissed Ballmer's claim, calling on US and European regulators and politicians to monitor for violations of anti-trust law and to insist on consumers' rights over collection of, and access to, their personal data.

Consumer Watchdog said the Federal Trade Commission (FTC) and Department of Justice (DoJ) should take a lead in monitoring Microsoft and Yahoo!. The DoJ last dragged Microsoft through the courts during the 1990s and earlier this decade for violation of anti-trust laws with its desktop OD and web browser.

One influential US politician, meanwhile, was quick to pledge "careful scrutiny" of the companies' deal.

US senator Herb Kohl, who chairs the Senate panel with responsibility for consumer rights and anti-trust issues, said the agreement will be "closely reviewed" by his sub committee.

"Our subcommittee is concerned about competition issues in these markets [internet search and advertising] because of the potentially far-reaching consequences for consumers and advertisers, and our concern about dampening the innovation we have come to expect from a competitive high-tech industry," Kohl said in a statement.

Consumer Watchdog noted the competitive search and advertising landscape will deteriorate - not improve - if the result is two enterprises that exploit users' data at the expense of their privacy rights.

John Simpson, an advocate with the group, said the FTC and DoJ must insist users retain control of their data, how it's used, and where its stored.

"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," he said in a statement.

Meanwhile, Google has apparently kept a low profile in opposing the deal. The DoJ is investigating Google's $125m book-scanning settlement with American authors and publishers for its Google Books Search service. ®

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