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IRS investigating if Mozilla-Google tax treatment is legal -- Why the DOJ should investigate too

There are reports that the IRS is investigating whether tax exempt Mozilla, the foundation behind the popular Firefox browser, can legitimately claim tax exempt status when 88% of the Foundation's revenues come from Google in payments for being the default search engine for Firefox downloads. 

I believe the DOJ should also consider investigating the Google-Mozilla relationship to see if Google anticompetitively gained an advantage -- given the facts, timing and circumstances.

  • Google and Mozilla, just this month, extended their search syndication arrangement for another 3 years.
  • November 5th, the DOJ concluded in blocking the Google-Yahoo partnership, that:
    • Internet search syndication is a separate relevant antitrust market; 
    • Google has 70+% share of the Internet syndication market; and
    • Google and Yahoo together have 95% market share of U.S. search syndication.
  • Mozilla's fast-market-share-gaining browser is among the most strategic search syndication relationships in existence -- for any competitor to gain search advertising and search syndication share.  
  • The June-November review of the proposed Google-Yahoo search syndication agreement (with 95% share) effectively presented Mozilla with no competition to bid for its search syndication business.
  • With Yahoo effectively off the search syndication market from June to November, Yahoo did not get an opportunity to bid on an arrangement that could have helped reverse its share loss to Google.
  • With Google-Mozilla extended for three more years, Google will be able to further erode Yahoo's market share over the next three years, in part because it effectively took Yahoo off the search-syndication market for several months when critical search share deals were coming due.

Bottom line:

Not only did Google anti-competitively keep Microsoft from becoming a stronger competitor in thwarting/delaying a Microsoft/Yahoo search deal, Google succceeded in denying its #2 and only real competitor in search syndication from becoming a stronger competitor by bidding for Mozilla's search default download business when it came up for renewal.

Google apparently has gotten away with crippling its two main competitors with little more than a slap on the wrist...