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Mozilla and Yahoo! launch high-cost lawsuit

08 December 2017

Yahoo's new owner Oath has entered a bitter lawsuit with American technology firm Mozilla over a breach of contract that's seen it favour Google.

The two companies are now suing each other over a 2014 deal that made Yahoo Firefox's default search provider. Venture Beat reports that Yahoo saw its search volume grow to a five-year high shortly after signing the deal. And in the eyes of Mozilla, that was grounds to terminate the agreement. In its announcement, it noted that Google was now the default search provider in the United States and Canada.

Yahoo/Oath is seeking damages, stating that it 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". Mozilla hit back on December 5 with a cross-complaint arguing that it was protecting its rights to enforce the contract. Marissa Mayer, the CEO of Yahoo at the time, looked to cut into the popularity of rival Google's search engine through the millions of Firefox users.

"As a result, it was one of the significant factors that contributed to the decline in Firefox usage".

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The lawsuits are just the latest of many stumbling blocks that Yahoo has faced in recent years.

Mayer did not think that such a thing would happen, but Yahoo's purchase by Verizon triggered the stipulation.

On 1 December, Yahoo Holdings and Oath filed a complaint against Mozilla - claiming it improperly terminated its agreement with Yahoo.

This led to the litigation being filed against Mozilla where the agreement between Yahoo and Mozilla was referred to both the companies which was established back in 2014. It had then stated they are taking to Mozilla and hoped to reach an amicable solution.

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Yahoo had earlier been taken by complete surprise with Mozilla opting to terminate the contract unilaterally.

We are committed to providing the best Firefox experience for users and will continue to encourage growth in search, provide users with local choices and promote innovation in the space.

"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. But according to a Mozilla statement on Tuesday , the company reviewed the deal following Yahoo's acquisition and chose to exercise its "contractual right" to terminate its agreement with Yahoo.

"The terms of our contract are clear, and our post-termination rights under our contract with Yahoo should continue to be enforced". We enter into all of our relationships with a shared goal to deliver a great user experience and further the web as an open platform.

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Deals between the software companies that develop web browsers and search engine providers can be quite lucrative and these agreements have earned Mozilla as much as $300 million a year or 90 per cent of its income.

Mozilla and Yahoo! launch high-cost lawsuit