Yahoo and Mozilla are suing each other over messy search engine deal

Yahoo's parent company sues Mozilla for breach of contract

Among others, Mozilla contends that Yahoo violated its contract by failing to improve its search engine.

Mozilla on the other hand claims that it had the right to end the agreement due to a clause in the contract which stipulates that Yahoo must continue to make payments to Mozilla until the end date even if it is no longer default search engine in Firefox.

On December 1, Yahoo Holdings and Oath filed a legal complaint against Mozilla in Santa Clara County court claiming that we improperly terminated our agreement.

The counter-claim also suggested that the allegedly missing payments have kicked a hole in Mozilla's budget. Yesterday, Mozilla filed a countersuit against Yahoo. She also noted that although numerous legal issues between the two organizations are confidential, Mozilla plans to create a wiki page and provide other details publicly in the interest of openness and transparency. (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. "The terms of our contract are clear and our post-termination rights under our contract with Yahoo should continue to be enforced", Mozilla legal head Denelle Dixon said in a statement.

Mozilla made a decision to switch the Firefox default search engine from Yahoo to Google, while requiring Oath to pay the annual $375 million payment that Yahoo promised. But when Mozilla last month launched the Firefox Quantum, a major update to the browser with Google as the default search provider, both the companies ended their partnership.

In 2014 the organisation ditched Google and picked Yahoo! for a five-year deal. It attributes this (at least in part) to Yahoo search. As the news of takeover emerged into the market, the agreement between Yahoo and Mozilla explicitly stated that the acquiring company would pay Mozilla $375 million per year through 2019 if Mozilla wasn't satisfied with the new owners of Yahoo. Yahoo's side of the story is that terminating the deal was a breach of contract. When it became clear that continuing to use Yahoo as our default search provider would have a negative impact on all of the above, we exercised our contractual right to terminate the agreement and entered into an agreement with another provider. We enter into all of our relationships with a shared goal to deliver a great user experience and further the web as an open platform.

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. The buyer must do this even if they did not want to work with Mozilla. Future proceedings should prove interesting.

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