Tech

Yahoo's parent company sues Mozilla for breach of contract

Yahoo's parent company sues Mozilla for breach of contract

Mozilla has finally come out in response to the litigation filed against them by Yahoo.

Mozilla and Yahoo have filed complaints against each other regarding the use of Yahoo as Firefox's default search engine. However, Mozilla has pulled the plug on the deal ahead of schedule, claiming that it was not getting paid.

Now, Yahoo's parent company, Oath (Verizon), is suing Mozilla for breach of contract.

Though users can switch their default search engine manually, the impact for companies having their search engine featured by default by a major browser such as Firefox shouldn't be underestimated - five months after the Mozilla / Yahoo deal was inked, Yahoo said that its search volume reached a five year high. The whole fiasco started when Mozilla sent a notice to Yahoo on November 10 stating that the "strategic agreement" between the two firms will be terminated immediately.

The majority of Mozilla Corporation's revenue is from royalties earned through Firefox web browser search partnerships and distribution deals around the world. In a counter complaint, Mozilla says that it was not only justified in terminating the contract early, but that Yahoo Holdings and Oath still have a bill that needs to be settled. The foundation noted that Yahoo Search failed to meet the specification stated in the contract, and it claims that Yahoo's new owners, Oath, lacks any strategic plan in developing its search business. The public version of Yahoo's complaint, filed Friday in Santa Clara County Superior Court, was largely blacked out, presumably because the allegations include confidential contract terms. In 2014, it had entered into a deal with Mozilla to be the default search engine for five years.

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KitGuru Says: From the sounds of it, Yahoo agreed to a pretty bad deal with some unfavorable clauses when it comes to new ownership.

Mozilla has, however, defended the move claiming that it has the right to terminate the contract and take decisions that are best in the brand's interest and help it in improving the services for its users.

That precise thing occurred just a few weeks back, as the company launched its new Quantum browser, switching back to Google in the process. In the midst of the negotiations, some fine print in the Mozilla / Yahoo contract surfaced. It also blames Yahoo for dragging down Firefox usage, by failing to improve the company's search engine. Along with it, Verizon inherited an annual payment of $375 million through 2019.

The terms of our contract are clear and our post-termination rights under our contract with Yahoo should continue to be enforced. Still, we are proud of how we conducted our business and product work throughout the relationship, how we handled the termination of the agreement, and we are confident in our legal positions. Prior to the 2014 deal, 90% of Firefox users stayed with the default search engine, according to Mozilla.


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