The European Union announced yesterday that it will be reviewing the advertising partnership between Yahoo Inc. and Google Inc. for antitrust implications. The decision came as a result of the criticism received from major advertisers in the United States and also a worldwide association of newspapers. The deal is already under investigation with the U.S. Justice Department.

The World Association of Newspapers, which represents close to 18,000 newspapers, claims that the deal, if approved, would offer Google "unwarranted" market power, generating more than $800 million in annual revenue. Even though the two companies claim that their partnership will only affect North America, the newspapers are certain that the European market will also be touched and that the matter demands a more careful analysis.

The deal was announced back in June soon after the talks between Microsoft and Yahoo failed to reach a conclusion. Google and Yahoo decided to postpone the start of their work together until antitrust officials will investigate the deal and reach a conclusion. The plan was to limit their affairs to the United States and Canada in order to avoid a European review. Unfortunately, the fact that they also conduct business overseas attracted the attention of the European Commission, which, according to Jonathan Todd, a spokesman for the EU's competition commission, fears that the two might be violating the rules of anti-competitive practices, such as price-fixing and sharing of sensitive business information.

"In mid-July, we decided to open a preliminary investigation on our own initiative into potential effects of the Google-Yahoo agreement on competition in the European Economic Area (EEA) market," European Competition Commissioner Spokesperson Jonathan Todd explained for Reuters.

"The agreement is limited in scope to Yahoo's U.S. and Canadian websites, and it will not have any significant effect on Europe […] We are confident that the arrangement is beneficial to competition, but we are not going to discuss the details of the regulatory process," explained Google spokesman Adam Kovacevich, who also added that the company is fully cooperating with the European regulators in order for the investigation to run smoothly.

Even though it is a well known fact that the European Commission is a lot more aggressive when it comes to enforcing the rules, so far the two major players do not seem scared of the potential damage that a negative ruling might bring. In fact, plans are being made and strategies are being considered at the moment for making up for lost time, as Google and Yahoo are certain that there is nothing wrong in their deal and when (not if) the approval comes they want to be prepared to get right down to business.

Hilary Schneider, in charge of Yahoo's U.S. operations, wanted to make it clear that her company is still committed to an advertising deal with Google. She also expressed her firm belief that the regulators will be comfortable with the partnership and that Yahoo is planning to move forward with the procedures as early as next month, even if the review will not be finished.