EU investigating Google/Yahoo deal too

Why should U.S. regulators have all the fun? The European Union (EU)

confirmed that it too is investigating the upcoming Google/Yahoo ad deal to discern if it stifles competition in the European Economic Area, according to this guardian.co.uk story. While Google claims the EU has no cause for concern, especially since the deal covers only Yahoo sites in the U.S. and Canada, the EU move can’t be good news for Google. As others in the past (Microsoft) have found, EU regulatory scrutiny is plain bad for business.

The latest move by the EU is in addition to its rumblings over Google’s privacy policies. while it seemed sated by Google’s latest moves there, where the company agreed to reduce its data retention to 9 months (down from 18), the new investigation shows that the EU continues to keep Google in its regulatory crosshairs.

While Google doesn’t seem worried, and is saying it still intends to go through with the Yahoo deal in October, perhaps it should be. If the U.S. or EU decide to initiate a lawsuit aimed at blocking the deal–even if they’re unsuccessful–it could leave Google drained in time and money. And while Google’s eye is on the regulatory ball, it will have fewer resources to invest in staying ahead of its competition. It happened to Microsoft; it can happen to Google.