Mozilla and Yahoo! launch high-cost lawsuit

Marissa Mayer

Yahoo! CEO Marissa Mayer speaks at Tech Crunch Disrupt NY 2014- Day 3

Firefox's default search engine has become the subject of a hotly contested legal battle, a few weeks after Mozilla announced it would be moving from Yahoo to Google.

Yahoo as a search engine has been facing tough competition from the search engine giant Google.

Mozilla has chose to drop Yahoo as the default search engine for its Firefox browser in favour of Google and now both companies have filed lawsuits against each other. According to Recode, the terms of the agreement stipulated that whomever acquired Yahoo would be obligated to pay Mozilla "annual payments of $375 million through 2019, even if [Mozilla] does not think the buyer was one it wanted to work with and walked away".

Mozilla looks to be in a very firm legal position here and has already demanded that Oath hand over $750 million to retain the contract.

Yahoo has now sued Mozilla for breach of contract, though, Yahoo has said that it had brought the change to the notice of Mozilla befit exiling the suit.

We recently exercised our contractual right to terminate our agreement with Yahoo based on a number of factors including doing what's best for our brand, our effort to provide quality web search, and the broader content experience for our users.

Mozilla's termination of its agreement is "a breach of the plain terms of the parties' contract", Yahoo Holdings/Oath said in a heavily redacted version of its December 1 complaint.

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Yahoo Search consistently failed to retain users and search volume over time, reducing the potential revenue [for Mozilla] under the Strategic Agreement.

"Yahoo has suffered and will continue to suffer competitive injury to its business and reputation, among other harm", the complaint says. (In response, Mayer's legal team agreed to have her testify before the Senate Commerce Committee-an outcome Mayer had initially resisted-and reportedly requested that lawmakers withdraw the subpoena in order for her testimony to "appear voluntary.") Now, her specter is reportedly haunting the remains of a deal between Yahoo's new owner, Oath, and Mozilla, inciting a legal battle.

Yahoo/Oath have not commented on Mozilla's countersuit.

On Tuesday, Mozilla filed a counter-claim in court to force Yahoo to hold up the terms of the deal, and pay up.

Mozilla basically says that Yahoo failed to uphold search quality standards that it promised to maintain at the time of the initial agreement in 2014. "Yahoo Acquirer's leadership provided no vision, no structured, documented and vetted strategic path forward, and no assurances as to a commitment of the resources necessary to improve Yahoo Search such that it would meet" and then some more redaction cuts in.

"Verizon's policy positions are also diametrically opposed to Mozilla's positions on core issues such as net neutrality and cybersecurity", Mozilla-a big support of net neutrality-said in the complaint.

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