I'm confused. I thought monopolies in the US are legal. I thought that abusing the power of a monopoly was the illegal part. Were they going to charge them as being a monopoly? Or charge them with illegal monopolistic practices?
IANAL, but it is my understanding that at issue here is the deal would (could) have created / extended a monopoly. Antitrust in the US does not disallow monopolies, per se, as you note; however, it does disallow creation or furthering of a monopoly via contracts, M&A, conspiracies, collusion, etc.
From US Code Title 15, Chapter 1, § 1:
Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal.
The other sections of that chapter discuss some specifics (such as §18, which specifically covers M&A) and there is a wealth of case law backing it up and clarifying, as well.
I don't know why they ever went forward with this. When your market share is 70% and climbing, you really have to watch out for these sorts of things. The relatively minor profits they would have made from Yahoo aren't worth making anyone in the DoJ think twice about you.
I guess when it came down to it, they decided that taking that risk was better than Microsoft ending up with Yahoo, which makes Yahoo's decision not to sell even more ludicrous. As Sun Tzu said (loosely paraphrased) figure out what your opponent wants you to do and then do the opposite.
Google may never have expected the move to pass antitrust review. Even as a feint, this proposal sufficed to drive MS away from Yahoo, which Yahoo's management at the time also wanted.
Yeah, I don't know. Probably. Just seems risky to even put the notion in the DoJ's collective head that you need watching for monopoly concerns. Maybe less risky than having a combined Microhoo competitor, idk. If I'm Yahoo and I think that one through, it would make me want to sell more, but then I guess I would have said "sold" the minute the original offer came in.
I am not much familiar with anti trust laws. Can a foreign firm make this deal with Yahoo ? If yes then Google can create a proxy firm to make the deal, will it still be considered monopoly ?
this probably means that instead of trying to look for high profile deals, Google will instead spend the money acquiring some startups with a growth potential
Oh and to summarize the story. According to a DOJ consultant Sanford Litvack Google they were 3 hours away from filing anti-trust charges against Google when the plug was pulled on the Yahoo! deal.
Is there a lawyer in the house?