Justice reviewing Microsoft-Yahoo deal

The Justice Department is formally reviewing Microsoft's proposed online search and advertising agreement with Yahoo, according to sources familiar with the situation, in the first wave of opposition the deal will likely face from antitrust regulators and lawmakers. The review will also be a litmus test for how aggressive the newly appointed antitrust officials will be in regulating the online advertising industry, one of President Obama's biggest supporters. The Obama Administration has said it will increase scrutiny of anti-competitive practices in the technology sector. Consumer groups say the proposed pact could reduce competition and choice for consumers while increasing the data collected about their online behavior. Microsoft and Yahoo both process enormous amounts of information about users, and consolidating that data could lead to more in-depth tracking of online activities, privacy advocates say. "This will be a test to see whether the new Obama antitrust team has real teeth when it comes to regulating this industry," said Jeffrey Chester, founder of the Center for Digital Democracy. "If Yahoo is turning over its search business to Microsoft, it will no longer have an independent search arm," he said. "It will be a company that's incapable of competing. This is nothing more than a takeover by Microsoft." Privacy advocates have also raised questions about the deal with the European Union. The European Commission, the EU's executive arm that reviews joint ventures and mergers, has not yet said whether it will examine the deal.