Mozilla, Yahoo Sue Each Other Over Firefox's Default Search

Alfred Osborne
December 7, 2017

The legal battle started after Mozilla replaced Yahoo with Google. Verizon isn't renowned for its commitment to search, and it doesn't seem like the most natural of bed partners for Firefox, so it seems as though this was the reason why Mozilla pulled the plug on its Yahoo search deal. Yesterday, Mozilla filed a countersuit against 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.

Mozilla legal head Denelle Dixon continued, "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. 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".

Mozilla looks to be in a very firm legal position here and has already demanded that Oath hand over $750 million to retain the contract.

Mozilla's posted an explanation of its actions that explained it ended the deal "based on a number of factors including doing what's best for our brand, our effort to provide quality web search, and the broader content experience for our users".

The terms of our contract are clear and our post-termination rights under our contract with Yahoo should continue to be enforced. This came as Mozilla launched Firefox Quantum, a major update to the browser that has been earning rave reviews. She also noted that although numerous legal issues between the two organizations are confidential, Mozilla plans to create a wiki page and provide other details publicly in the interest of openness and transparency.

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Mozilla's termination of its agreement is "a breach of the plain terms of the parties' contract", Yahoo Holdings/Oath said in a heavily redacted version of its December 1 complaint. Still, we are proud of how we conducted our business and product work throughout the relationship, how we handled the termination of the agreement, and we are confident in our legal positions. If Yahoo's lawsuit succeeds, Mozilla will have to pay for the costs of the court case, prejudgment interest, and possible material damages as determined by the court. In order to secure the Firefox deal in the first place Marissa Mayer had agreed that in any change-of-control scenario Mozilla had the right to leave the partnership if it did not deem the new partner acceptable.

"Yahoo has suffered and will continue to suffer competitive injury to its business and reputation, among other harm", the complaint says.

Mayer's tenure at Yahoo was marred by a series of questionable management decisions that included spending $3 billion on acquisitions and famously paying ad man Henrique de Castro $109 million for 15 months of work.

Of course, Oath - which owns Yahoo and Verizon - isn't happy with this arrangement. Other parts of Yahoo's business have been renamed "Altaba".

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