The search advertising partnership between rival search engines Google and Yahoo, announced recently, is to be investigated by the US Department of Justice due to concerns about competition.
The two companies account for more than 75% of searches worldwide between them, and US officials are worried that the link up would give them too much control over the search advertising market.
The Department of Justice has been looking at the deal since mid-June, but announced this week that it would now be launching a formal investigation.
Under the deal, which is effective only in North America, Google provides advertising in Yahoo’s search results, with the two firms sharing the revenue.
While Google accounts for around 63% of worldwide searches, it is even more dominant in some European markets, the UK included, and there are concerns that an extension of the deal outside North America would be anti-competitive.
The Google-Yahoo deal does not have to be approved by US antitrust authorities to go ahead, as the two companies do not plan to merge, but the government could challenge the arrangement in court if it felt that competition between the two would be restrained.
Both companies have now agreed to give antitrust authorities three months to look at the deal before going ahead.