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Justice Dept To Investigate Google-Yahoo Deal 105

Posted by CmdrTaco
from the no-surprise-here dept.
Anonymous Oddity writes "The Washington Post is reporting that the Justice Department's investigating the Yahoo-Google advertising deal. Obviously the deal controls a massive portion of the internet advertising market. US Antitrust law isn't entirely intuitive, but it does tend to frown on large deals between companies that operate on the same level if those deals can be interpreted as restrictive of trade."
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Justice Dept To Investigate Google-Yahoo Deal

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  • Taxdollars wasted... (Score:3, Interesting)

    by dada21 (163177) <adam.dada@gmail.com> on Wednesday July 02, 2008 @08:56AM (#24028611) Homepage Journal

    Considering that both these companies are publicly traded, I think it is more important for those who are investors to consider what is best for them. If the general public thinks it might be hampered by consolidation of two large competitors, than the public should invest en masse and vote against it.

    I've always been confused how publicly traded companies can be considered "monopolies" in any situation except where your governments regulate them into becoming monopolies. If you don't like how a company acts, buy some stock and get your friends and family and cohorts to do the same, then go in and work to change it.

    Owning a share is owning a voting right, albeit a tiny sliver minority share. But if you want to change things, do it from within, not from outside.

    Yahoo is still profitable, but they're losing market share. Why? Because Google does a better job providing their users with services they want. Duh. If Yahoo can't compete, then it's time for liquidation. There are still thousands of search engines out there, so competition will work its magic.

    IBM was the monopoly, but they were chopped down by Compaq. Compaq was the monopoly, and they were chopped down by Microsoft. Microsoft was the monopoly, and they were chopped down by Google. Google's the monopoly, and they'll be chopped down by the next 18 year old college drop out startup that implants a realtime search engine in your sunglasses.

    • Re: (Score:3, Insightful)

      by maglor_83 (856254)

      Because most people don't have the millions of dollars needed to buy enough shares to make a difference. And if they did, then they'd buy the shares and not vote to change anything because they would stand to benefit in the form of increased share value.

      • Re: (Score:3, Interesting)

        by dada21 (163177)

        Because most people don't have the millions of dollars needed to buy enough shares to make a difference. And if they did, then they'd buy the shares and not vote to change anything because they would stand to benefit in the form of increased share value.

        So you just proved my point!

        If millions of people felt they were harmed in any way, what is the problem with each of them putting up $100 or $500 to control the so-called monopoly? Let's say that 50 million Americans would feel harmed by a merger. Let's sa

        • Re: (Score:3, Interesting)

          by dreamchaser (49529)

          If millions of people felt they were harmed in any way, what is the problem with each of them putting up $100 or $500

          To millions of people even $50 is a lot of money. Your utopia sounds great, but in reality it's not that black and white.

        • Re: (Score:2, Interesting)

          by Stook (1270928)
          If you can get 50 million Americans to rally behind a single cause with $100-$500, you sir could either A) Take the $5-25 billion and start your own company or buy several countries; B) Rig the next election (only 62 million people voted) or C) All of the above.

          The fact of the matter is that it would be easier to get a job and work your way up corporate ladder than to for the average Joe to buy shares and change the system. Aside from the cost it would take just in logistics for that individual, or coord
        • by Kelbear (870538)

          Organization is a non-trivial obstacle to leveraging money. The cost of organizing is another cost on top of the money used for leverage(people have jobs to do while they're monopoly busting). Also, the justice dept is investigating. This is because it's not immediately obvious that anything needs to be done. How many individuals have the time and money to conduct individual investigations into the google-yahoo deal? Would they even be given any access?

          The government uses a similar foundation and a differen

        • I doubt 'people' would be harmed - most people would be quite happy to no longer be getting adverts because the costs are becoming prohibitive to businesses. Presumably it would be the businesses themselves that are harmed when google can change its ad prices to anything it wants because of a monopoly position. If I don't like a company's ethics, I'm not going to buy any of its shared shares - I think that would help them much more than harm them, unless as you say millions of people do the same thing and v

        • by Jimmy_B (129296)

          If millions of people felt they were harmed in any way, what is the problem with each of them putting up $100 or $500 to control the so-called monopoly?

          That never happens, even in the most extreme cases where corporations literally go raping and pillaging. That's because buying shares to stop a corporation from doing something you don't want has the opposite of the intended effect: it drives up the share price, rewarding the unwanted behavior. And unless you're a billionaire, you'll never get enough votes t

    • Only three people have voting rights in Google. Larry, Sergey, and Eric.

    • by morgan_greywolf (835522) * on Wednesday July 02, 2008 @09:12AM (#24028841) Homepage Journal

      I've always been confused how publicly traded companies can be considered "monopolies" in any situation except where your governments regulate them into becoming monopolies. If you don't like how a company acts, buy some stock and get your friends and family and cohorts to do the same, then go in and work to change it.

      Just because a company is publicly traded, that doesn't excuse them from monopolistic practices, sir.

      Nobody I know -- even die-hard Windows fans -- likes how Microsoft acts in the business world. That doesn't stop them from buying their products, though.

      None of the people I know who trade stocks trade based on the ethics of a company, either. All of them care only about shareholder value and potential shareholder value. It's all about the dinero.

      The problem you have, Mr. Dada, is that you tend to assume that people care about how a company acts enough to influence their choices. But people choose based on what's best for their own livelihood (as well they should). They also don't often choose what's best for their own livelihood in the long run, but tend to look at the short-term. And in the short-term, companies maintaining a monopoly always seem to have the most shareholder value.

      And, in the end, public shareholder don't always get a vote anyway. Most of the voting shares of Google are held by Sergei and Larry and guys like that. All the rest of the shareholders don't get much of a say.

      • Re: (Score:3, Insightful)

        by value_added (719364)

        The problem you have, Mr. Dada, is that you tend to assume that people care about how a company acts enough to influence their choices. But people choose based on what's best for their own livelihood (as well they should).

        At the risk of sounding like a Birkenstock-wearing politically-correct social activist, I'd suggest that while that may a fair generalisation, it smacks of an orthodoxy that has its popularity and appeal founded in a comforting but simplistic view of the world.

        I don't shop at Walmart, my f

        • Re: (Score:2, Interesting)

          I don't shop at Walmart, my food comes mostly from local organic farmers

          Sure about that? If you shop at, say Whole Foods Market, for instance, most of the organic produce they sell is produced by Big Agra, not local farms.

          As for Walmart, while I don't like some of their business practices, some of their other business practices are actually okay. For example, they have very good non-discriminatory hiring practices in place and they give lots of money to community non-profit organizations and schools and

          • Sure about that? If you shop at, say Whole Foods Market, for instance, most of the organic produce they sell is produced by Big Agra, not local farms.

            No, I buy most everything at Farmer's Markets. And then I tend to buy from the vendors I get to know, which is pretty easy given that most people there are more than happy to talk about what they do and how they do it.

            As for Walmart, well, that's a big issue. My only point is that the price of something is, at least for me, never the deciding factor in a pur

        • by drinkypoo (153816)

          Here, I'll get this one.

          The problem you have, Mr. Dada, is that you tend to assume that people care about how a company acts enough to influence their choices. But people choose based on what's best for their own livelihood (as well they should).

          At the risk of sounding like a Birkenstock-wearing politically-correct social activist, I'd suggest that while that may a fair generalisation, it smacks of an orthodoxy that has its popularity and appeal founded in a comforting but simplistic view of the world.

          Actually, you just sound like an idiot who stopped reading when you became incensed. Here's the part you should have read:

          But people choose based on what's best for their own livelihood (as well they should). They also don't often choose what's best for their own livelihood in the long run, but tend to look at the short-term.

          What the comment to which you replied was saying is that people tend to focus on their short-term livelihood. It didn't say that this was positive. It simply di

          • Actually, you just sound like an idiot who stopped reading when you became incensed.

            What I did was was make a comment with respect to the often repeated statement that people act in an entirely selfish manner, a mantra that, if the popular press is any indication, is taken as gospel.

            If calling that socio-economic theory into question (by providing a data point of one) is viewed by you as "not addressing the issue", "idiotic", "half-cocked", and written by someone who "failed" English and was "incensed", th

      • by merc (115854)

        The problem you have, Mr. Dada, is that you tend to assume that people care about how a company acts enough to influence their choices.

        I was going to say "That's Mr. Dada to you", but you already had that covered.

    • by Wister285 (185087)

      While I do partially share your share your view of publicly held companies, I think you are too romantic. Cash is king on the Street and dictates just about everything, including voting rights. Most companies are held by institutional investors. They don't care about Google or Yahoo!. They care about GOOG and YHOO. When they make their buck, they move on. It's their fiduciary responsibility.

      I think this is probably the greatest aspect and most tragic flaw of the Street. It's also why the market can b

      • by dada21 (163177)

        I think this is probably the greatest aspect and most tragic flaw of the Street. It's also why the market can be so fun and so painful all at the same time!

        And what makes a stock jump or fall?

        Let's look at General Motors... For decades they were booming in stock price. Why? Because individual consumers such as yourself went out and bought their merchandise. Sales of vehicles were up -- but not because you, a GM buyer, saw they had a high stock price. You bought their vehicle for decades because you lik

        • by Wister285 (185087)

          I agree totally with you on this point. I thought you were talking about proxy fights!

        • by R.D.Olivaw (826349) on Wednesday July 02, 2008 @09:38AM (#24029265)
          So first you argue that we don't need oversight because consumers can fight monopolies then you give an example of how consumers buy competitor's products to affect a corporation's stock value? Here's the catch, when there is a monopoly, the lowly consumer does not have the choice to go buy another product.
        • by dimeglio (456244)

          Here's an analogy. If a company advertises on city busses because they are the most visible, can cab companies complain to limit this advertising? What if the bus company strikes a deal with horse carriages, does this cause prejudice to cab companies in terms of advertisement potential?

          Can this type of deal put cab companies out of business?
          What if this ad placement income was the cab company's only revenue?

        • I don't think that google sells any consumer products. They only sell advertising and enterprise services like hosted mail and search. I don't think that many people will stop using a free web site just to deprive the owner of ad revenue.
    • Re: (Score:2, Informative)

      by oldhack (1037484)

      ... I've always been confused how publicly traded companies can be considered "monopolies" in any situation except where your governments regulate them into becoming monopolies...

      IBM was the monopoly, but they were chopped down by Compaq. Compaq was the monopoly, and they were chopped down by Microsoft. Microsoft was the monopoly, and they were chopped down by Google. Google's the monopoly, and they'll be chopped down by the next 18 year old college drop out startup that implants a realtime search engine in

    • > I've always been confused how publicly traded companies can be considered "monopolies" in any situation except
      > where your governments regulate them into becoming monopolies. If you don't like how a company acts, buy some
      > stock and get your friends and family and cohorts to do the same, then go in and work to change it.

      This sounds good in theory but not in reality. Although the only time this effectively works is by a powerful investor activist that decides to work his way on the board of d
    • That that Carl guy and msoft are both or singly behind prodding the DOJ to actually review the merger or collaboration deal. If that Carl guy and that other one named Ballmer were not so vociferously after Yahoo!, then I doubt the DOJ would probe or investigate for too long.

      Hell, are the DOJ going to investigate InBev? Are they going to investigate Anheuser Busch/Dos Equis?

      If Yahoo! and Google strike an arrangement that actually does measurable, sustained, enduring and painful retardation of microsoft, then

    • IBM was the monopoly, but they were chopped down by Compaq. Compaq was the monopoly, and they were chopped down by Microsoft. Microsoft was the monopoly, and they were chopped down by Google.

      When did Compaq chop down IBM? And when was Compaq a monopoly? Microsoft still is a monopoly as is Google for all intents and purposes. But they are monopolies in different markets.

  • by elrous0 (869638) * on Wednesday July 02, 2008 @08:57AM (#24028635)
    I just hope it's as exhaustive as their investigation into the Valerie Plame leak or O.J.'s hunt for the real killer.
    • Re: (Score:3, Interesting)

      by R2.0 (532027)

      "I just hope it's as exhaustive as their investigation into the Valerie Plame leak "

      You mean how they found the source of the leak (Richard Armitage), but didn't prosecute him?

    • by mqduck (232646)

      I don't know. I think they Justice Department might be all tied up on more important issues, like steroids in baseball.

  • Hmmmm..... (Score:2, Insightful)

    Strange how when Microsoft offered a deal to outright buy Yahoo, DoJ remained silent, but when Yahoo and Google want to team up, they're all over them.

    <sarcasm>But there wouldn't be anything shady going on at the Justice Department, oh, no. You can trust those guys.</sarcasm>


    • That's because Marshall Mathers has been spending his efforts at the **AA's.

    • Re: (Score:3, Interesting)

      by maxume (22995)

      Microsoft isn't the market leader in internet advertising and internet search advertising. Microhoo still would have been the second place company behind Google.

      • Re: (Score:3, Insightful)

        Microsoft isn't the market leader in internet advertising and internet search advertising.

        That's a red herring. They are still the market leader in desktop operating systems and, at the end of the day, they intend to leverage that to knock Google out of business because Google has been threatening their core business, especially with Google Apps.

        Microsoft going after Google isn't about Microsoft expanding its market, it's about removing a potential threat to their core OS and office suite usiness.

        • by maxume (22995)

          That may well be the case, but I'm pretty sure that the justice department would need material evidence showing that what you say was Microsoft's intent in buying Yahoo, whereas with Google, they can look into it based on their relative position in the search market.

          (I tend to think that Microsoft is getting into the internet because they see it as a valuable place to do business; Office seems to be doing fine on its own, and the number of people moving away from Windows is not yet 'huge')

          • Re: (Score:2, Informative)

            If they want material evidence, they just need to look at every other market Microsoft has been in and see how they've managed to leverage their OS and office suite monopoly to dominate it.

            • by maxume (22995)

              Console gaming? Zune? Peripherals? Servers? Databases?

              • Well, I'll leave the rest as an exercise to the reader, but as for the biggest one, two words: Internet Explorer.

              • I'll leave the reast as an exercise to the reader, but the biggest one...well, two words: Internet Explorer.

                • by maxume (22995)

                  So instead of "every other market Microsoft has been in" you meant "each market they've managed to leverage their OS and office suite monopoly to dominate" (that is awkward because I am mostly cutting and pasting what you said)?

                  • Pretty accurate, yes.

                    Also, I believe it's only a matter of time before Xbox360 begins to dominate more in the gaming console market. No one, including Sony, saw Wii coming, and Sony can't manage to keep dominating the rest of the market PS3 much longer at the prices they insist on charging.

                    • by maxume (22995)

                      Surely their success (or lack thereof) in the console business is not a result of leveraging their market position in PC operating systems and Office software (they could be dumping, but that's related to their financial position, not leveraging their other products).

                    • Says who? The way I understand it, the original name for XBox was DirectX Box, and it is my understanding that games targetting DirectX can be ported to Xbox and Xbox360 with little or no modification -- just a recompile.

                      If that's not leveraging their OS monopoly, I don't know what is.

                    • by maxume (22995)

                      It comes down to whether you make a distinction between taking advantage of and leveraging. It actually makes sense to have that compatibility and is only really harmful to the extent that it makes it more difficult for multi-platform developers to create a compatibility layer.

                      (which they have to do regardless for multiple platforms, the standard isn't that they need a compatibility layer to run on PS3 and Xbox360, it is whether any directXness of the code for the 360 makes it more difficult to write code c

                    • it is whether any directXness of the code for the 360 makes it more difficult to write code compatible with the PS3)

                      Bingo.

                    • by Kalriath (849904) *

                      There's a hell of a lot more than just a recompile. For example, the Xbox OS doesn't export function names - it exports ordinals (at least from what I read of the original Xbox OS). That alone requires major rejigging of an app.

            • by H0D_G (894033)

              except mp3 players. Zune still has low sales compared to creative and iPod.

      • But its a growing industry and Microsoft is a behemoth that has already been investigated for antitrust in a fairly closely neighboring industry - and weakly slapped on the wrist for it.

        I think its pretty weak - if they investigate this then they should re-open the microsoft case - i still can't buy a PC without windows on it (unless it's a mac) that has to be much more anticompetitive.

        • by initdeep (1073290)

          you havent tried to buy a pc lately then.

          Dell has been selling N series computers for over 4 years that I"M AWARE OF.

          They could have been selling these for a lot longer.

          They also sell Ubuntu preloaded as well.

          So do many other places.

          OH!
          You mean you can't buy a PC from a really large OEM other than Dell a fully loaded version of the OS you want.

          That's called economics.

          There isn't enough demand for it.

        • i still can't buy a PC without windows on it (unless it's a mac) that has to be much more anticompetitive.

          Sure you can. Dell sells PCs with Ubuntu, and PCs sans OS (N-series). HP sells machines that can be preloaded with FreeDOS or SUSE Linux [hp.com].

          Most small OEMs offer PCs with either no OS or FreeDOS and some will install just about any OS you request. There is even one small OEM that I know that sells nothing but machines pre-loaded with Linux.

        • "i still can't buy a PC without windows on it"

          You might want to open an investigation into this. When is the last time you tried to buy a PC?
        • by lgarner (694957)

          Is Microsoft requiring that all computers come with Windows? Or is it the individual seller that's only packaging it that way?

    • Re: (Score:3, Interesting)

      by MrNaz (730548)

      Strange how when Microsoft engages in big deals they're called monopolists, yet when Google takes over advertising from the only real competition it has, you act all surprised the the DoJ raises an eyebrow.

      Microsoft was the geeks' darling 15 years ago. Is it going to take us another 15 years to realize that Google is just another Big Corp that will bite, scratch and steal its way into a position where it can dictate our lifestyles to suit its profit agenda?

      • Microsoft was the geeks' darling 15 years ago. Is it going to take us another 15 years to realize that Google is just another Big Corp that will bite, scratch and steal its way into a position where it can dictate our lifestyles to suit its profit agenda?

        Speak for yourself. I knew Microsoft was evil 15 years ago (1993) just as I know it now.

        • by MrNaz (730548)

          Microsoft isn't any more or less evil than any other big corporate, same as Google. Google isn't "not evil" just because they have a slogan that says so.

          Stop being naive.

    • by Kelbear (870538)

      Google and Yahoo working together would be #1 marketshare holder working with the distant #2 marketshare holder.

      Yahoo and MS would be the distant #2 market share holder working with the distant #3 market share holder.

      Even united these two would still be smaller than Google. Google is already the biggest, and adding yahoo to the biggest player in the market makes this even more unbalanced, hence the call for an investigation.

      I suspect that even if MS and Yahoo worked things out then they may have been invest

    • It isn't strange if you consider the state of MS web services vs that of Google's. As a slashdot reader it is hard to forget that the DoJ exists for reasons other than dealing with MS. (No sarcasm, I do it too.)
    • by futureb (1075733)
      an antitrust investigation on deals like this wouldn't begin until there is an agreement and an HSR filing, which would then trigger a DOJ or FTC review. so are you saying that DOJ should have investigated Microsoft for merely offering to buy a company? i don't think so.
  • Chevron can buy Texaco, Mercedes can buy Chrysler, the Baby Bells buying each other and ATT, Steel companies, and so many other examples. "isn't entirely intuitive" is putting it mildly, but it boils down to whether the Justice Department wants to enforce the law at a given point in time.


    I can't believe this won't happen in some form, even if they have to make some cosmetic changes to make it look better.

  • This reminds me particularly of the deal they did with Ask Jeeves. I reckon that Yahoo is in a good deal of trouble these days having not embraced search technology earlier and they're looking to get the same monetary boost to push into some different areas where perhaps they won't be such a "distant second".

    I won't presume to know how the regulators will consider it, but I think that Google already has the monopoly on search advertising. Until they abandon their doing no evil, this is not such a bad thing.

  • by 140Mandak262Jamuna (970587) on Wednesday July 02, 2008 @09:40AM (#24029287) Journal
    I've always been confused how publicly traded companies can be considered "monopolies" in any situation except where your governments regulate them into becoming monopolies. If you don't like how a company acts, buy some stock and get your friends and family and cohorts to do the same, then go in and work to change it.

    So people who don't have money to invest will have no say in how the economy is run, even if their life depends on how the economy is run? Great Idea, dude. 80% of the wealth in the country is concentrated in the hands of 20%. And recursively 64% (80% of 80%) of wealth in the hands of 4% (20% of 20%). So these rich people can get together, buy all providers of a service that is crucial for the population and tell rest of them pay an arm and leg for the service as consumers or pay an arm and a leg to buy shares? You are very confused.

    The role of the government is to ensure competition. To enable the consumers not investors to vote with their dollars. Truth in labeling laws, truth in advertising laws, fair competition are all essential part of the free markets. Yes, The current top dogs of capitalism will bitch moan and bellyache. But unless we have the second tier dogs snapping at their heels, we all will be screwed dude.

    • Re: (Score:3, Insightful)

      by aztektum (170569)

      The role of the government is to ensure competition.

      In theory at least. Sadly, that theory doesn't hold up in many cases.

  • Why are they "investigating" this when there is a giant monopoly in the operating system and office suite markets? Maybe they should do something about monopolies that have existed for >15 years before looking at google and yahoo, especially when the former actually provides a good product. It's tough to be "overpriced" or "exploitative" when you give away your product for free.
    • Re: (Score:3, Insightful)

      by Irish_Samurai (224931)

      Search isn't their product.

      They sell YOU to the ADVERTISERS.

    • by SebaSOFT (859957)

      The answer is simple. MICROSOFT made the justice Dept. to investigate this. Remember the "don't be evil" slogan doesn't apply to the Redmond-based company.

  • "...but it does tend to frown on large deals between companies that operate on the same level if those deals can be interpreted as restrictive of trade." I don't understand where this alleged harms users. Should I worry that if I search on Yahoo! - something I never do, by the way - I will see the same ads as the identical search would yield on Google? Where does non-competition come into play? Hell, I never read those ads, let alone click on them. Well, maybe that one time, for those herbal penis enlarge
    • by danzona (779560)
      I believe that in your example the user that is potentially being harmed is not the searcher, it is the advertiser that paid for the ads that the searcher sees. Hopefully when viewed from the advertiser's point of view, the concern about non competition will be apparent.
  • Let me paraphrase that MadMoney guy, hoping not to get it wrong. The merger between Serius and XM radio has gone on for almost two years, and now they also want hearings on internet advertising as a monopoly? They didn't even have one hearing when several huge oil companies merged a few years back. Any push against Yahoo and Google, I bet, can be traced back to some lobbyist (probably from Microsoft).
    • Good analogy and exactly the point I was going to make (about M$ paying enough lobbyists to make a stink about this issue, who the hell else cares that much and has the $$ to bribe^H^H^H^H^Hinfluence our elected officials for this non-issue?). That merger got held up while many made the fast-track; Exxon Mobile anyone? There's two hurting companies that needed to get together for some synergy. From wikipedia:
      "In 1998, Exxon and Mobil signed a US$73.7 billion definitive agreement to merge and form a new c

  • 1. The Bush administration is generally opposed to business regulation, so there's a good question as to why they're changing their tune now.
    2. Why did the same folks that are considering blocking GOOG-YHOO had no problem with MSFT-YHOO?

    Combine those factors, and it's possible someone threw a chair at the FTC to make sure this potential merger doesn't happen.

  • and how easily private interests can have the government launch an 'investigation' for their own benefit ?

    that billionaire guy jumped in and attempted a hostile takeover of yahoo to force a merger with microsoft. it failed due to the board's resistance. the faggot tried to oust the board through shareholders. he failed.

    and now suddenly government launches an antitrust investigation to google-yahoo deal that axed the billionaire faggot's filthy takeover attempt. anyone to believe that this 'investigati
    • by shentino (1139071)

      Well stated, poorly worded.

      Someone mod parent up for insightful.

    • by CTachyon (412849)

      ... it failed due to the board's resistance. the faggot tried to oust the board through shareholders. he failed. ...

      Do not taint me by comparing me to Carl Icahn.

      Prick.

  • I haven't been following this as closely as I should have, but I do know that Yahoo was resisting the MSFT deal in opposition to many shareholders, and sought out GOOG at least partially to avoid lawsuits. So, either the deal goes through and there's a strong force vs. MSFT or the deal doesn't go through and... IANAL, but I would assume... they have enough to avoid shareholder lawsuits (ie, we tried with GOOG and the gov't said no; why would we assume any different with MSFT?).

  • Those two companies collectively represent a vast amount of Web consumer traffic, even if they're not actually combined into a single entity. Investigating them should probably be a matter of course, like inspecting a deep, complex mine shaft essential to a nation's infrastructure. Or a large freight rail combine. Or a chain of regional airports throughout, say, the upper plains states, but a lot bigger and more important.

    Since the proposed merger will have monopolistic effects on a market with drastically

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